bond-basics

Guaranty

A third party’s promise to pay the Debt Service on the Bonds or perform some other obligation, which is the primary obligation of another party.

Guarantor

The third party that executes a guaranty.

The amount of principal and interest required to be paid on an issue of bonds.

The use of the credit of an entity having greater financial strength than the issuer or borrower to improve the credit quality of a bond issue.

A contract typically seen in transactions that involve a letter of credit or a guaranty.

An interest rate which is set at the time a bond is issued and which does not vary during the term of the bond.