Bond markets allow entities to raise funds by issuing debt securities from "summary" of Financial Markets and Institutions, Global Edition by Frederic S. Mishkin,Stanley G. Eakins
Bond markets play a vital role in the financial system by providing a platform for entities to raise funds through the issuance of debt securities. When companies, governments, or other organizations need to borrow money, they can do so by issuing bonds to investors in the bond market. These bonds represent a promise to repay the borrowed amount, known as the principal, along with periodic interest payments at a specified rate. Entities may choose to issue bonds in the bond market for a variety of reasons, such as financing new projects, expanding operations, or refinancing existing debt. By issuing bonds, entities can access a wider pool of potential investors beyond traditional lenders like banks. This can lead to lower borrowing costs and greater flexibility in terms of repayment schedules and interest rates. ...
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