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Understanding Tradable Debt: Bonds

An Overview of Tradable Debt Instruments

Tradable debt, commonly known in the form of bonds, is a crucial financial tool used by various entities, including governments, municipalities, and corporations, to raise capital. Bonds represent a loan made by an investor to a borrower and are a popular way for organisations to finance projects and operations.

What Are Bonds?

  • Debt Securities: Bonds are debt securities where the issuer owes the bondholders a debt and is obliged to pay interest (the coupon) and/or to repay the principal at a later date, known as the maturity date.
  • Tradable Instruments: Unlike traditional loans, bonds are tradable. This trading capability allows investors to buy and sell bonds before they mature, providing liquidity and flexibility.

Key Features of Bonds

  • Interest Payments: Bondholders generally receive regular interest payments, known as coupons, during the life of the bond.
  • Repayment of Principal: Upon reaching its maturity date, the bond issuer repays the principal amount of the bond.
  • Risk and Return: The risk and return on bonds can vary significantly, depending on the issuer's creditworthiness and the bond's duration and interest rate.

Stay in touch

To learn more about how Coop Exchange plans to build financial solutions tailored to coops, please contact us at debtfunding@coop.exchange.

Please note that the content of this page is for general information and educational purposes only. In so far as it relates to Coop Exchange’s potential services these relate to a future state once the Coop Exchange platform is launched and appropriately regulated. The information is not provided, and should not be construed as the provision of financial advice, the promotion of an investment product or dealings or arrangements in investments. Investments bring risk and so anyone wishing to invest (whether in coops equities, debt or other securities) should first obtain appropriate advice from an authorised person before doing so, please see also our Regulatory Notice.