A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
Bond holders love when market interest rates rise. Why? Because the value of the bonds they hold increases proportionately.As demand for bonds increases, so do bond prices and bondholder returns. The University has variable or floating interest rate bonds outstanding as part of its long term debt strategy. Some bond mutual funds are filling the role of a liquidity supplier, alongside a decline in dealer participation in marketmaking activities. In the bond markets reflect current supply-demand considerations as opposed to psychological factors? Declines in U.S. Treasury bond prices since late July.