[Verse 1] When corporations need some cash to grow They print a promise, here's what you should know A coupon payment twice throughout the year Par value's what you get when maturity's here One thousand dollars face, that's standard fare But market price will fluctuate with care [Chorus] Bonds are IOUs with fancy names Coupon, maturity, par value games Call provisions let them pay early Put provisions, you decide surely Government, corporate, municipal too MBS and ABS, there's quite a few [Verse 2] Fixed rate payments never change their tune Floating rates dance with prime rates in June Zero coupon bonds pay nothing each year But discount pricing makes the yield appear TIPS adjust for inflation's sneaky bite Treasury bonds backed by government might [Chorus] Bonds are IOUs with fancy names Coupon, maturity, par value games Call provisions let them pay early Put provisions, you decide surely Government, corporate, municipal too MBS and ABS, there's quite a few [Bridge] Indenture contracts spell out every rule Affirmative covenants, negative tool Sinking funds retire the debt each year Convertible bonds switch to equity gear Primary markets where new bonds are born Secondary trading until they're worn [Verse 3] Municipal bonds dodge the tax collector Sovereign debt from nations, risk detector Supranational bonds from World Bank crew CDOs package mortgages anew Over-the-counter trading dominates No central exchange, just bid-ask rates [Chorus] Bonds are IOUs with fancy names Coupon, maturity, par value games Call provisions let them pay early Put provisions, you decide surely Government, corporate, municipal too MBS and ABS, there's quite a few [Outro] Securitized assets bundled tight CMOs slice mortgage cash flow right From corporate boardrooms to Treasury halls Bond markets answer when borrowing calls
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