Bond market refers to a type of financial market in which different parties engage in the sale and purchase of debt securities, specifically in the form of bonds. This may also be called debt market, credit market, or fixed income market. Bond markets can be classified into different kinds. The type of a bond market is determined by the kinds of bonds sold, or the main focus of a particular market.
The government bond market is usually used as a point of reference. This is because it is the biggest bond market in its territory. In government bond markets, the credits risk is usually relatively low and these are also quite sensitive to interest rates.
It is quite common to buy and sell bonds issued by a government or one of its agencies. These can be used for fund-raising purposes and may be done for the purpose of pursuing a project. If the said project is expected to produce revenue once it has been completed, then the bond is one that is short-term.
One type of bond market is corporate bonds. Under this type of market, companies are given the authority to issue bonds to investors. One option under this market is for the bonds to be issued at a discounted rate, with the face value paid upon maturity. The other option is to issue bonds at face value to be later repaid with interest.
Information on the different types of bonds can be requested from brokerage houses. These can help investors choose which ones to invest in, depending on their needs and preferences.