Definition

An IOU from a company or government saying 'we promise to pay you back with interest, assuming we don't go bankrupt.' It's the grown-up version of asking your parents for a loan, except with legal documentation and the terrifying possibility of total loss.

Example Usage

We're issuing $500 million in corporate bonds at 5% interest, betting that we'll still exist in 10 years.

Source: Finance and investment terminology

Related Terms

Beginner

FOMO Investing

Making investment decisions based on the fear that everyone else is getting rich without you, which historically has been the most reliable way to buy at the top. It's the financial equivalent of joining a dance floor just as the DJ switches to a slow song.

💰 Finance / Accounting
Advanced

Negative Pledge

A loan covenant preventing borrowers from pledging assets as collateral to other lenders, protecting unsecured creditors from being subordinated. It's lenders making sure you can't promise the same car to multiple people.

💰 Finance / Accounting
Intermediate

internal controls

Processes and procedures designed to prevent fraud, errors, and general financial chaos within an organization. They're like locks on doors—ineffective if someone with a key decides to rob the place, but they keep honest people honest.

💰 Finance / Accounting
Advanced

ring-fencing

Legally separating certain assets or operations to protect them from creditors or risks in other parts of the business. It's building financial walls to ensure that when one division explodes, it doesn't take the whole company down.

💰 Finance / Accounting
Advanced

Arbitrage

Buying something cheap in one place and selling it for more in another, which sounds like a genius strategy until you realize it's basically what your cousin does with concert tickets. Wall Street just gave it a fancier name and added decimal points.

💰 Finance / Accounting
Beginner

Compound Interest

Interest earning interest on itself, which Einstein allegedly called the eighth wonder of the world, though he probably never had a credit card balance. It's magical when it works for you and absolutely devastating when it works against you.

💰 Finance / Accounting

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See “bonds” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

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