Name: Financial English Vocabulary VV 29 - Bonds (Lesson 2) | English Vocabulary for Finance & Economics
Uploaded: 2026-01-19T17:43:10.000Z
Duration: 8 min 11 s
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Adverbs of manner

You're watching video vocab by businessenglishpod.com Bonds have been a hot topic in the news recently, but

what exactly are bonds and how do they work?

Previously, we looked at some of the main ideas and vocabulary for bonds, including such terms as yield, coupon, maturity.

In this lesson, we'll look at different types of bonds and we'll explain some of the key terms related to how bonds are priced and traded.

Government Bond Treasury Bond A government or treasury bond is issued by a national government to finance their operations.

Government bonds from developed countries are considered safe investments but often have a lower coupon rate.

The largest foreign holder of U.S. treasury bonds is the Chinese central government.

Municipal Bond Municipal Bond Municipal bonds are issued by cities, towns or states to finance their operations or pay for large projects such as building a new road or school.

The city issued $75 million in municipal bonds in order to fund major repairs to its roads.

Corporate Bond Corporate Bond Large companies issue corporate bonds to pay their expenses or finance new projects.

The risk and coupon rate of corporate bonds varies depending on the company's stability and performance.

When the government bond market is doing poorly, investors tend to look to corporate bonds issued by major multinationals.

Junk Bond Junk Bond A high risk, high yield bond is called a junk bond.

Money invested in junk bonds often disappear because the company fails, but

they can be very profitable amid major political trouble.

Hungary's government bonds have been downgraded to junk bond status.

Ratings Agency Ratings Agency A ratings agency such as Standard and Poor's or Fitch analyzed the risk of different bonds and gives them a rating.

This rating is usually stated in letter grades such as aaa, BBB or BB plus.

The Fitch ratings agency gave notice to France that its AAA credit rating was at risk.

Discount Discount Bonds are sometimes sold at a discount.

This means the purchase price is lower than the face value of the bond, like when you buy a thousand dollar bond for $900.

Governments sometimes issue new bonds at a small discount to offset the effects of inflation.

Premium Premium When a bond is sold at a premium, its price is higher than the face value of the bond.

This happens when a bond is seen as very valuable on the open market.

The company's bonds are selling at a big premium.

Par Value Par Value the par value of a bond is its face value.

While the price of a bond on the open market may change, the par value remains the same.

The national bank of Greece offered to buy back $2.5 billion of bonds at 70% of their par value.

Now it's your turn to practice some of the words we have studied.

In this episode, you'll hear a series of sentences with a word replaced with a beep.

Repeat the whole sentence, including the missing word.

For example, if you hear U.S. treasury were long considered the safest investment possible, You can say U.S.

treasury bonds were long considered the safest investment possible.

We'll play the correct answer after each question.

Greek government bonds have been downgraded to bond status.

Greek government bonds have been downgraded to junk bond status.

After reporting a huge profit, General Motors bonds are selling at a.

After reporting a huge profit, General Motors bonds are selling at a premium.

The fitch rating warned that uk government bonds may be downgraded to triple b.

The fitch rating agency warned that uk government bonds may be downgraded to triple b.

That's all for this episode of Video Vocab.

Be sure to check out our website at www.videovocab.tv for more videos on business English vocabulary.

Thanks for watching and see you again soon.

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