Bonds (5)

Who sells or issues bonds?

Governments,

government agencies and

corporations which need funds, for the bond market is another avenue for raising capital.

When a bond is issued, it means the government or corporation is borrowing a specified amount of money from the investor for a specified period of time.

The bond market comprises government bonds and private or corporate bonds.

The government bonds were initially issued to meet the investment needs and to fund the budget deficits of the government.

Later bonds were issued to raise funds for financing public sector developmental expenditure.

Corporate bonds, also known as private debt securities (PDS), are issued by corporations.

Such bonds are privately placed with investment institutions and traded on the secondary market by finance companies and discount houses.