Exchange Traded Bonds & Sukuk (ETBS) : 1

Glossary of Exchange Traded Bonds and Sukuk (ETBS)

Coupon

The interest amount the ETBS holder will receive above the principal amount. It is generally expressed as a percentage of the principal value.

Coupon Frequency

The frequency with which coupon payments are made to ETBS holders.

ETBS Holder

The owner of a bond or sukuk asset.

Guarantor

The government, commercial or holding company that will act as a guarantor for the ETBS issuer in case of a default.

Issuer

A company or government organisation that issues bonds/sukuk to investors in order to raise funds for its operations, expansion or other needs.

Maturity Date

The date when the ETBS issuer pays the principal amount to the holder. It is also known as redemption date.

Principal

The amount borrowed by the issuer or the amount lent by investors. Typically, this is the value returned to the ETBS holder upon maturity. It is also known as nominal value, par value, redemption value or maturity value of a bond.

Trustee

A financial organisation that has been given fiduciary powers to ensure obligation of the bond contract is met between the ETBS issuer and the ETBS holder. They act in the interest of the ETBS holder.