page_title: Bond (finance)
section_title: Principal
hierarchical_section_title: Bond (finance) / Features / Principal
caption_attribution_description: English: 1978 $1000 8 3-8% Treasury Bond (reverse)
context_page_description: In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. The most common types of bonds include municipal bonds and corporate bonds. Bonds can be in mutual funds or can be in private investing where a person would give a loan to a company or the government.
  The bond is a debt security, under which the issuer owes the holders a debt and is obliged to pay them interest or to repay the principal at a later date, termed the maturity date. Interest is usually payable at fixed intervals. Very often the bond is negotiable, that is, the ownership of the instrument can be transferred in the secondary market. This means that once the transfer agents at the bank medallion stamp the bond, it is highly liquid on the secondary market.
  Thus a bond is a form of loan or IOU: the holder of the bond is the lender, the issuer of the bond is the borrower, and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure.
context_section_description: Nominal, principal, par, or face amount is the amount on which the issuer pays interest, and which, most commonly, has to be repaid at the end of the term. Some structured bonds can have a redemption amount which is different from the face amount and can be linked to the performance of particular assets.
caption: 1978 $1,000 U.S. Treasury Bond
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