What Are Bonds? Basic Features and Components

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Lyrics

[Verse 1]
When companies need cash to grow and thrive
They craft a promise, keeps their dreams alive
A bond's a loan with terms written in stone
You lend your money, they'll pay back what's owed

[Chorus]
Par value, coupon, maturity date
Three pillars standing at the financial gate
Par's the face amount they'll repay
Coupon's your interest along the way
Maturity's when the contract ends today
Bonds are promises that borrowers make

[Verse 2]
One thousand dollars is the standard face
That par value sets the repayment base
Semi-annual payments flow your direction
Coupon rate determines your collection

[Chorus]
Par value, coupon, maturity date
Three pillars standing at the financial gate
Par's the face amount they'll repay
Coupon's your interest along the way
Maturity's when the contract ends today
Bonds are promises that borrowers make

[Bridge]
Governments and corporations alike
Issue these IOUs when funds run tight
Fixed income streams for patient investors
Debt securities with built-in protectors

[Verse 3]
Ten year treasury or corporate note
Each bond's a contract that the issuer wrote
Principal returns when time expires
While coupons feed your income fires

[Final Chorus]
Par value, coupon, maturity date
Three pillars standing at the financial gate
Par's the face amount they'll repay
Coupon's your interest along the way
Maturity's when the contract ends today
Bonds are promises that borrowers make

[Outro]
Debt securities with features clear
Foundation knowledge you'll hold dear

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