Bonds en - Products - Bonds A Bond is a debt instrument that is a contract between the issuer of debt and the debt holder (also called "investor"). Bonds must have specifically defined maturity dates, interest rates, and other benefits. Also, interest payment dates and redemption dates/principal payment dates must be specified at time the bond is issued in addition to the maturity period. Bonds are transferable and can be traded.

 

Bond issuers are borrowing from the bond buyer, so the issuer is the "debtor" while the buyer is the "lender" or "creditor." Being debt, bonds are unlike equities or common stock, where investors buy shares which represent ownership in a company.
 

“Debt instrument” is a broadly used term. But generally speaking, in Thailand “bond” is often used to refer to debt instruments issued by governments or state enterprises, while “debentures” are most often issued by private companies.  In other countries, "bond" may refer to debt issued by both government and private entities, while debt instruments unsecured by collateral are referred to as "debentures."

 

A bond’s prospectus will provide information regarding interest rates, frequency of the coupon payments, term to maturity, par value, redemption value, and other pertinent information.

 

Once a bond is auctioned off on the primary market, investors can trade it on the Thailand Bond Exchange (TBX), which first opened November 26, 2003.  TBX provides real time trading with data transparency throughout the process of clearing and settlement.  While TBX aims to develop the bond market in terms of efficiency, trading volume, debt quality, and trading intermediaries, TBX's overriding goal is to develop the Thai bond market to achieve international standards on par with mature bond markets worldwide.  Finally, the Thailand Bond Exchange is an important step towards creating a vibrant Asian Bond Market, whose development and progress can contribute to the regional economy.

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