Episode Summary A bond is simply a loan you can sell to a stranger. While the underlying loan mechanics are straightforward, the secondary resale market introduces structural complexities that can cause a bond's price to crash even when the borrower is perfectly healthy and paying on time. This episode strips away the jargon to explain the contract of debt, outlines how it sits within a company's capital stack, and examines why bonds are "differently risky" rather than completely safe.

Key Concepts

• The Four Defining Elements: Every bond is contractually defined by its issuer (who is borrowing), principal (par value to be repaid at the end), coupon (the fixed interest rate), and maturity (when the principal is ret ...