debt

Borrowed money that a company must repay with interest.

When a company raises capital through debt¹

• company issues bonds
• takes out loans

Requires the borrower to pay back the principal amount along with interest over time.

Investors buy debt (e.g. bonds) and get periodic interest payments (coupons) and the return of the loan principal when the debt matures.²

• debt underwriting

Footnotes

1. The company can also raise capital through equity ↩

2. But they do not get any ownership share in the company ↩