Introduction to Bonds Payable

Corporate Bond Financing

A bond is a formal debt instrument issued by a company to raise capital from investors. Bondholders lend money to the issuer in exchange for periodic interest payments and repayment of principal at maturity.

• Issuer receives cash from investors.
• Bondholders receive periodic interest.
• Principal is repaid at maturity.
• Bonds may be secured or unsecured.

A bond is essentially a long-term loan divided into many smaller investment units.