Definition of Sovereign Bond

Financial Terms Beginning with S

What is a Sovereign Bond

A sovereign bond is a debt-obligation that is issued by a national government to raise money for financing government programs, to pay debt, to pay interest on current debt and to handle any other government spending needs.

A sovereign bond is a form of sovereign debt and is generally regarded as a riskier investment than government bonds since sovereign bonds are subject to movements in exchange rates.

Glossary of Terms and Phrases

A financial dictionary or glossary is an essential tool to better understand the meaning of a specialized term or phrase. It would obviously make life much easier if everyone spoke the same language and used the same financial terms and phrases but that is not realistic.

We learn new languages to communicate with each other, transact business globally and to appreciate other cultures. Global finance is a specialized language that if understood and mastered, it will provide benefits that help to decrease risk and improve investment returns. Financial literacy is the foundation of developing good investment strategies and sound decision making.

Related Investment Terms

Emerging Market

Foreign Investment Risk

Investment Banking

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