There are many different bond issuers: U.S. corporations, the U.S. Treasury, cities and states as well as federal, state, and local government agencies. Many overseas governments and businesses also sell bonds on the U.S. market, as well as in international markets.
Corporate bonds
Bonds are major sources of corporate borrowing. Debentures,
the most common type of corporate bond, are backed by the general credit of the corporation, while asset-backed bonds are backed by specific corporate assets, such as property or equipment.
Municipal bonds
Millions of bonds have been issued by state and local governments. General obligation bonds are backed by the full faith and credit of the issuer, and revenue bonds by the income generated by the particular project being financed.
Agency bonds
Some government sponsored but privately owned corporations (like Fannie Mae and Freddie Mac), and certain federal government agencies (like Ginnie Mae and Tennessee Valley Authority) issue bonds to raise funds either to make loan money available or to pay off new projects.
U.S. Treasurys Treasury notes are a major source of government funding. Notes have intermediate terms, and promise to pay the principal on or before the maturity date. Treasury bills,
or T-bills, are the largest components of the money market,
where short-term securities are bought and sold. Investors use T-bills for part of their cash reserve or as an interim holding place. Interest is the difference between the discounted buying price and the amount paid at maturity.
