B

Glossary · PSX term

Bond.

A bond is a loan to a government or company that pays interest and repays the principal at maturity.

Definition

Bondholders receive periodic coupon payments and get their principal back at maturity, with prices moving inversely to interest rates. In Pakistan, corporate bonds are often called Term Finance Certificates (TFCs).

Worked example

A company issues a 5-year bond paying KIBOR plus a margin to borrow from investors.

Related on PSX Clarity

Term Finance Certificate (TFC)

Treasury bills (T-bills)

Yield to maturity

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