The most common types of bonds are sovereign bonds, municipal bonds, corporate bonds and financial bonds.
● A sovereign bond is a debt security issued by a national government to support government spending.
● A municipal bond is a debt security issued by a state, municipality or county to finance its construction of local public facilities, such as transportation, communication, housing, education, hospital and sewage treatment system.
● A corporate bond is a debt security issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, M&A, or to expand business.
● A financial bond is a debt security issued by a financial institution such as banks, asset managers and insurance companies to raise capital.