[header] How to invest in bonds [title] Learn how a bond works. [step] A bond is a debt instrument issued by a government entity or a corporation to raise capital. The purchaser of a bond is a creditor and the bond issuer is the debtor.
[header] How to invest in bonds [title] Learn how a bond works. [step] A bond is a debt instrument issued by a government entity or a corporation to raise capital. The purchaser of a bond is a creditor and the bond issuer is the debtor.
A debtor can purchase a bond but not the entirety of the debt. [substeps] The creditor does not actually sell the debt. [substeps] When a bond is issued, it is sold to investors for the first time. The investor pays the issuer (government or corporation) for the bond. As a seller, you are a guarantor to the bonds. The purchaser gets the same right of liquidation as the seller. The creditor then pays dividends to the purchaser (the bond issuer), which is essentially the employer. These bonds come in different ways and cost different amounts of money.