Debt Market

The debt market, is the arena in which investment in loans are bought and sold. There is no single physical exchange for bonds. Transactions are mostly made between brokers or large institutions, or by individual investors.

Investments in debt securities typically involve less risk than equity investments and offer a lower potential return on investment. Debt investments by nature fluctuate less in price than stocks. Even if a company is liquidated, bondholders are the first to be paid.

Bonds are the most common form of debt investment. These are issued by corporates or by the government to raise capital for their operations and generally carry a fixed interest rate. Most are secured and are issued with a rating by one of several agencies such as Moody’s to indicate the likely integrity of the issuer.

The debt market is one of the important platforms for raising debt. Debt Market Instruments helps the issuers to procure funds and satisfy their needs.