Bond

/bond/, n.

1. Carrie (nee Jacobs), 1862-1946, U.S. songwriter and author.

2. Julian, born 1940, U.S. civil-rights leader and politician.

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I

In construction, the systematic arrangement of bricks or other building units (e.g., concrete blocks, glass blocks, or clay tiles) to ensure stability.

Units laid with their ends toward the face of a wall are called headers; units with their lengths parallel to the wall are called stretchers. Common types are the English bond (courses of stretchers and headers alternate), the Flemish or Dutch bond (headers and stretchers are laid alternately within each course, each header being centered over the stretcher below it), and the American bond (every fifth or sixth course consists of headers, the rest being stretchers). See also masonry.

II

In finance, loan contract issued by local, state, and national governments and by private corporations, specifying an obligation to return borrowed funds.

The issuer promises to pay interest on the debt when due (usually semiannually) at a stipulated percentage of the face value and to redeem the face value of the bond at maturity in legal tender. Bonds usually indicate a debt of substantial size and are issued in more formal fashion than promissory notes, ordinarily under seal. Government bonds may be backed by taxes, or they may be revenue bonds, backed only by revenue from the specific project (toll roads, airports, etc.) to which they are committed. Bonds are rated based on the issuer's creditworthiness. The ratings, assigned by independent rating agencies, generally run from AAA to D; bonds with ratings from AAA to BBB are regarded as suitable for investment. See also junk bond.

III

In law, a formal written agreement by which a person undertakes to perform a certain act (e.g., appearing in court or fulfilling the obligations of a contract).

Failure to perform the act obligates the person to pay a sum of money or to forfeit money on deposit. A bond is an incentive to fulfill an obligation; it also provides reassurance that compensation is available if the duty is not fulfilled. A surety usually is involved, and the bond makes the surety responsible for the consequences of the obligated person's behaviour. See also bail.

IV

(as used in expressions)

Bond Horace Julian

covalent bond

ionic bond

junk bond

revenue bond

limited obligation bond

Bonds Barry

Barry Lamar Bonds

hydrogen bonding

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▪ brickwork

      in masonry, systematic arrangement of bricks or other building units composing a wall or structure in such a way as to ensure its stability and strength. The various types of bond may also have a secondary, decorative function.

      Bonding may be achieved by overlapping alternate courses (rows or layers) in brickwork, by using metal ties, and by inserting units vertically so they join adjacent courses. A bond course of headers (units laid with their ends toward the face of the wall) can be used to bond exterior masonry to backing masonry. Headers used in this manner may also be called throughstones, or perpends. Units laid with their lengths parallel to the face of a wall are called stretchers.

      Among the more common types of bond are the English bond, in which bricks are laid in alternating courses of stretchers and headers; the Flemish (Flemish bond), or Dutch, bond, which consists of headers and stretchers laid alternately within each course, each header being centred over the stretcher below it; and the American bond, in which only every fifth or sixth course consists of headers, the rest being stretchers. The American bond is the most common because it is so easily laid. The herringbone bond is a variety of raking bond in which units are laid at an angle of 45° to the direction of the row, instead of horizontally. Alternate courses lie in opposing directions, resulting in a zigzag pattern. Other types of bond include the blind, block-in-course, chain, cross, cross-and-English, diagonal, dog's tooth, English-cross, flying, in-and-out, plumb, ranging, running, and split.

▪ finance

      in finance, a loan contract issued by local, state, or national governments and by private corporations specifying an obligation to return borrowed funds. The borrower promises to pay interest on the debt when due (usually semiannually) at a stipulated percentage of the face value and to redeem the face value of the bond at maturity in legal tender. Bonds usually indicate a debt of substantial size and are issued in more formal fashion than promissory notes (promissory note), ordinarily under seal. Contract terms are normally found in the indenture, an agreement between the borrower and a trustee acting on behalf of the bondholders. Interest payments on bonds are known as coupon payments; before electronic interest payments made the coupon system obsolete, the bond purchaser received a series of numbered coupons with the bond that represented every interest-payment date throughout the life of the bond. These were clipped from the bond by the bondholder and presented for payment, which usually occurred semiannually.

      When bonds are sold, interest accrued since the previous interest-due date is added to the sale price. Most bonds are payable to the bearer and are thus easily negotiable, but it is usually possible to have the bond registered and thus made payable only to the named holder. The great majority of bonds are callable, meaning that the issuer can redeem them at his option, upon appropriate notice, well before maturity. Maturity dates for bonds normally run from 5 to 30 years.

      Government bonds may be backed by the taxing power of the government unit issuing the bond, or they may be revenue bonds (revenue bond), backed only by the revenue from the specific projects—e.g., toll roads, airports, waterworks—to which they are committed. Corporate bonds may be secured by a lien against real estate (mortgage bonds) or other property, such as equipment (equipment obligations) owned by the borrower. If the bond is unsecured, it is known as a debenture bond.

      Bond ratings are grades given to bonds on the basis of the creditworthiness of the government, municipality, or corporation issuing them. The ratings are assigned by independent rating agencies (in the United States the largest are Standard & Poor's and Moody's Investors Service), and they generally run from AAA to D. Bonds with ratings from AAA to BBB are regarded as “investment grade”—i.e., suitable for purchase by banks and other fiduciary institutions. Bonds with ratings below BBB are considered “junk,” or high-yield, bonds; they are often issued by new or speculative companies. Although the risk of default for junk bonds is great, they offer higher rates of interest than more secure bonds.

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