Definition of Bonds Bonds or also known as bonds are certificates or securities containing the recognition of debt by the bond issuer to the investor (lender).
The definition of a bond is a certificate or securities whose contents are a contract between the investor as the bond holder and the bond issuing company which states that the bondholder has lent a certain amount of funds to the bond issuing company. The bond issuing company, as a fund borrower, is obliged to pay an amount of interest periodically according to a predetermined maturity and also pay off the principal when the bond matures.
Bonds payable are generally issued by government and private companies that require funds from outside the company. Bond coupons are the interest rate on bond loans that must be paid by debtors to creditors. In general, bonds are issued at a certain time. Bond loans are generally medium to long term. The average bond in Indonesia has a term of 5 years and a maximum of 30 years. Bonds are a product of the capital market. Not a product of a financial institution such as a bank or non-bank financial institution.
Banks are usually not responsible for all claims and risks that arise from investing in bonds. Bonds are not the object of the deposit insurance program. The bank is only a bond selling agent. Other agreements in the bond may include such as bondholders or restrictions on legal remedies that the bond issuer can take. Bonds are … Read More