bonded debt

Bonded debt refers to the money that organizations, such as governments or corporations, borrow by issuing bonds. When these entities need funds for projects, like building schools or infrastructure, they sell bonds to investors. The bond represents a loan: the investor lends money in exchange for regular interest payments and the promise of repayment at a future date. This method helps the borrower access capital without raising taxes or using existing funds, while allowing investors to earn interest on their investment. Essentially, bonded debt enables borrowing through the formal promise to repay.