Bond Issuers

Many entities issue bonds. The bond market separates bond issuers into categories based on the similarities of these issuers and their characteristics. These major categories are: supranational agencies (i.e. World Bank), national governments (i.e. Government of Canada), provincial or state governments (i.e. Province of Ontario), municipal governments (i.e. City of Edmonton) and corporate bonds (i.e. General Motors).

Bonds issued by governments are backed by the "full faith and credit" of the particular government; bonds issued by supranational agencies are backed by the "full faith and credit" of the governments supporting the agency. Governments have the power to raise taxes to make bond interest and principal payments. The revenues or tax base of a government compared to its expenditures form the key indicator of the creditworthiness of a government issuer. A corporate issuer's creditworthiness flows from its business prospects and financial capacity.

Related Articles

Government Bonds

Corporate Bonds

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