1. Bond Certificates are exchanged
$1,000
$10,000
$100,000
Bond Issue
$1,000,000
Financial
Intermediary
Corporation or
Government
General Public
Bond Holder
(Lender or Investor)
Bond Issuer
(Borrower)
Trustee
Bond Indenture:
Face Value – PAR Value, maturity Value
Stated Rate – Contract Rate, Coupon Rate
Maturity in Years
Semi-Annual or Annual Interest Payments
Not in Bond Indenture:
Purchase Price or Value of the Bond
Market Rate – Effective Interest Rate, Yield

2. Parties to a Bond Issue Bondholder [Investor]
**Lends money to Bond Issuer by purchasing Bond Certificates
**Expects Face Value of Certificate in return at maturity
**Expects Interest over the Life of the Bond Certificate in return
Bond Issuer [Corporation or Government Entity]
**Borrows money from the general public by issuing (selling) Bond Certificates.
**Expected to return the Face Value of the Certificate to the bondholder at maturity
**Expected to pay interest to the bondholders over the life of the bond certificates