Dictionary

Bond - Security Type

 

From the Collaborative Bond and Money Market Data Portal.  

 

In the Collaborative Bond and Money Market Data Model, the Bond classification appears within the field Security Type which is part of the universe of Bond and Money Market Instruments. 

 

Definition: A Bond is a negotiable debt instrument that promises to pay the bearer or registered owner an amount or a number of amounts in the future.  

 

As permitted by applicable securities laws, this instrument entitling the owner to a set of future cash flows, can be bought and sold to anyone. This negotiability distinguishes the instrument from a bilateral loan, where in theory you cannot sell the future cash-flows without the permission of payer.  

 

Unlike the MTN or Medium Term Note, the term Bond appears to be a more generic instrument (like Note) without any preconceived suggestions about duration. However, despite the suggestion that an MTN has a medium term, short term and also long term MTNs equally exists. Medium term in itself also has no strict definition. In some markets it can mean somewhere around 5 years, whilst in others it could mean 10 or even 15 years. The term Note therefore seems more or less synonymous with that of a Medium Term Note (MTN).  

 

The term Bond will typically mean that the instrument was under stand alone documentation and not issued under the legal terms and conditions of a MTN or Note Programme.  However, from a legal perspective, there is no difference between an instrument that is issued under the term of a programme and an instrument issued under stand alone documents. Indeed many MTN and Note programmes, such as a Debt Instrument Programme, also allow the issuance of bonds. 

 

In capital market data analysis it is therefore recommendable to look beyond the segmentation of markets by mere security type and instead focus on the actual term and structure of the instrument.  However, a distinction between CP, CD and Bills as instruments of the below 1 year money markets and Bonds, Notes and MTNs as instruments of the over 1 year bond markets seems fair.  

 

Based on available data, on the 1st of January 2016, the size of the MTN, Notes and Bond market was USD24.8trn through 95,430 instruments. 


 

For information on issues in the Bond Market, please use the Instrument search tool. 

For information on the current size and composition of the Bond Market, please use the data sheet tool. 

For information on active issuers in the Bond Market, please use the issuer search tool. 

For information on active dealers in the Bond Market, please use the dealer search tool. 

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