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| {{def|Debt security|/dɛt/ /sɪˈkjʊərɪti/|n|{{Layman|Bond}}}} | | {{essay|repack|Debt security|{{image|Transylvanian Bond|jpeg|A bond certificate with [[coupon]]s yesterday.}}{{Layman|Bond}} }} |
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| A freely transferable [[financial instrument]] evidencing [[indebtedness]]. Contrast [[debt securities]] to [[equity securities]] — instruments such as shares, warrants units, which pay neither principal nor interest, but rather account for the overall performance of the company who issue them. [[Debt security|Debt securities]] generally rank ahead of equity securities in the capital structure of the issuer. This is because an issuer must pays off [[creditor|creditors]] before [[shareholder|shareholders]].Comes in a few different types:
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| ===By type of issuer===
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| *[[Government bond]]s - issued by sovereigns so existing free of [[capital structure]], logically immune to insolvency, but practically distressingly capable of default (yes we're looking at you Argentina) and of course the [[Who is queen?|“who’s queen?” gambit]]
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| *[[Corporate bond]]s
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| *[[Structured note]]s — weird & wacky [[securitised derivative]]s, issued outta [[espievie]]s
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| ===By name===
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| Categorisations that will appeal (and occur) only to etiquette freaks — the sort of folk who are jazzed by which side of your plate you take the bun from — and lawyers:
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| *[[bond]] - traditionally a fixed rate debt security
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| *[[Note]] - traditionally a [[floating rate]] security
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| *[[Medium term note]] - A debt security issued off a programme rather than as a stand alone)
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| ===By interest feature===
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| *[[Fixed rate]] bonds
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| *[[Floating rate note]]s
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| *[[Zero coupon note]]s
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| ===By position in the [[capital structure]]===
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| ====[[Senior]]====
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| *[[Secured note|Secured notes]]
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| ====[[Pari passu]]====
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| *'''[[Bond]]''': {{bondcapsule}} Compare with a [[note]] — which traditionally bears interest at a [[floating rate]], and a [[medium term note]], which can be fixed, floating or structured with all kinds of exotic [[derivative]] payoffs, but is issued from a [[medium term note programme]], rather than as a stand-alone issue.
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| *'''[[Note]]''': {{notecapsule}}
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| *'''[[Medium term note]]''' (or “[[MTN]]”): {{mtncapsule}} At one time, [[MTN]]s were typically issued only for a medium term — up to about 5 years — but that's all gone now. They still get called [[medium term note]]s though. In practice standalone {{tag|bonds}} and {{tag|notes}} are far less common these days, because they’re such a faff to issue and list, whereas MTNs are much easier and do pretty much the same job. I know how much you love a {{tag|metaphor}}, so think of [[bond|bonds]] and [[note|notes]] as broadsheet newspapers, and [[MTN|MTNs]] as an android app.
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| *'''[[Convertible bond]]''':
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| ====[[Subordinated]]====
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| *'''[[Subordinated note]]''':
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| ===By funkiness===
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| *[[Repackaging]]s - See “weird and wacky securitised derivatives” - jam a [[par asset swap]] in an [[espievie]] and away you go...
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| *[[Securitisation]]s — monetising future cashflows, once so rock ’n’ roll that even Bowie was into it until someone had the idea of...
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| *[[Collateralised debt obligation|Collateralised debt ob —]] DON'T SAY IT YOU ARE NOT ALLOWED TO SAY IT IT IS LIKE VOLDEMORT
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| {{c|Securities}}
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| {{Bonds listed}}
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| *[[Security]]
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| {{ref}}
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