Plain-English Guide to Bond Market Terms

A fixed-income bond issued by a company that cannot be converted into equity.

A short-term unsecured debt instrument issued by corporates and NBFCs.

A securitisation instrument where investors receive cash flows from an underlying loan pool.

The total annualised return an investor earns if they hold a bond until it matures.

The extra yield a corporate bond pays over a comparable government bond, reflecting credit risk.

One hundredth of one percentage point — the standard unit for measuring yield and spread changes.

A measure of a bond's sensitivity to interest rate changes — expressed in years.

An independent assessment of an issuer's ability to repay its debt obligations on time.

A rating assigned to a securitisation or credit-enhanced instrument, based on the structure rather than the originator.

Issuing bonds directly to a select group of institutional investors, without a public offer.

The process of gauging investor demand and setting the final price of a bond issuance.

An option to issue additional bonds beyond the base issue size if investor demand is strong.

The RBI's electronic trading platform for government securities.

RBI-mandated lending targets for banks to specified sectors — a key driver of securitisation demand.

Providing more collateral than the face value of the bonds issued — a form of credit enhancement.

A legally separate entity created solely to hold assets and issue securities in a securitisation.