- Accrued interest
- Interest earned since the last coupon date, paid by the buyer to the seller in addition to the clean price.
- Basis point
- One hundredth of a percentage point (0.01%). Yields and spreads are commonly quoted in basis points.
- Bearer bond
- A bond owned by whoever physically holds the certificate. Early Eurobonds were bearer bonds; today they are held in global form.
- Benchmark
- A reference yield used for pricing, such as a government bond or the mid-swap rate; also a large, liquid bond issue.
- Bid–ask spread
- The difference between the price at which a dealer buys and sells a bond.
- Bookrunner
- A bank that manages the order book on a new issue.
- Bullet bond
- A bond repaid in a single amount at maturity.
- Call option
- The issuer's right to repay a bond before maturity.
- Clean price
- Bond price excluding accrued interest.
- Clearstream
- International central securities depository based in Luxembourg, founded as Cedel in 1970.
- Collective action clause
- A clause allowing a qualified majority of holders to bind all holders to amended terms.
- Coupon
- The interest rate a bond pays on its face value.
- Covenant
- A promise by the issuer in the bond terms, such as a negative pledge or limit on debt.
- Credit rating
- An agency's opinion of an issuer's or bond's creditworthiness.
- Credit spread
- Extra yield over a low-risk benchmark that compensates for credit and liquidity risk.
- Day count
- The convention used to calculate interest for part of a period, e.g. 30/360.
- Default
- Failure to make a payment or meet other terms of the bond.
- Dirty price
- Clean price plus accrued interest; the amount actually paid.
- Duration
- A measure of a bond's price sensitivity to changes in yield.
- EMTN programme
- Euro Medium Term Note programme; a framework allowing frequent issuance from one base prospectus.
- Euroclear
- International central securities depository based in Brussels, founded in 1968.
- Eurodollar
- US dollars deposited in banks outside the United States.
- Face value
- The amount repaid at maturity; also called par or nominal.
- Fallen angel
- A bond downgraded from investment grade to high yield.
- Floating-rate note
- A bond whose coupon resets periodically to a reference rate plus a margin.
- Global note
- A single certificate representing a whole bond issue, held for the clearing systems.
- Green bond
- A bond whose proceeds finance environmentally beneficial projects.
- High yield
- Bonds rated below investment grade (below BBB-/Baa3).
- ICMA
- International Capital Market Association, the trade body setting standards for the international bond market.
- Investment grade
- Bonds rated BBB-/Baa3 or higher.
- ISIN
- International Securities Identification Number; Eurobonds usually begin with XS.
- Lead manager
- Bank mandated to arrange and distribute a new bond issue.
- Make-whole call
- A call at a price based on the present value of remaining payments discounted at a benchmark plus a small spread.
- Maturity
- The date on which the face value is repaid.
- Mid-swaps
- The midpoint of the bid and offer swap rate for a maturity; a common pricing benchmark for euro issues.
- Negative pledge
- A covenant preventing the issuer from granting security to other creditors without equally securing the bond.
- Par
- A price of 100% of face value.
- Pari passu
- Ranking equally with other obligations of the same type.
- Paying agent
- The bank that receives payments from the issuer and passes them to the clearing systems.
- Perpetual bond
- A bond with no maturity date.
- Prospectus
- The offering document describing the issuer, risks and the terms of the bond.
- Put option
- The investor's right to sell the bond back to the issuer at a set price.
- Regulation S
- US rule allowing securities to be sold outside the United States without US registration.
- Rule 144A
- US rule allowing resale of unregistered securities to qualified institutional buyers.
- Settlement
- The exchange of bonds for cash after a trade, usually T+2 in the secondary market.
- Sovereign bond
- A bond issued by a national government.
- Subordinated bond
- A bond ranking behind senior debt in insolvency.
- Supranational
- An institution owned by several governments, e.g. the World Bank or EIB.
- Syndicate
- The group of banks that underwrites and distributes a new issue.
- Trustee
- An entity acting on behalf of all bondholders under a trust deed.
- Yield to maturity
- The total return of a bond held to maturity, expressed as an annual rate.
- Yield to worst
- The lowest yield possible on a callable bond across all call dates and maturity.
- Zero-coupon bond
- A bond that pays no coupon and is issued at a discount to par.