Fixed Income
Default
Definition
What is Default?
Failure to meet a contractual obligation, such as paying interest or principalThe original amount of money invested or lent, excluding later returns. when due.
Example in practice
How This Looks in Practice
The issuer enters default after missing a scheduled coupon payment.
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Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.