Bond
In one sentenceA security representing a loan from its holder to the issuer, under which the issuer pays a fixed or variable periodic return and then repays the nominal value at maturity.
Simply put
A bondholder is a creditor of the issuer, not a partner in it: they receive the agreed return whether or not the issuer makes a profit, and rank ahead of shareholders on liquidation.
A bond's market price moves opposite to yields: if market yields rise, the price of an old bond with a lower return falls.
Worked example
A bond with a nominal value of 1,000 SAR pays an annual return of 5% and matures in 10 years.
Annual return1,000 × 5% = 50 SAR
Total returns over 10 years50 × 10 = 500 SAR
Amount repaid at maturity1,000 SAR
Total received by the bondholder = 500 + 1,0001,500 SAR
Don't confuse it with
SukukA sukuk represents a share in the ownership of assets or benefits from which the return comes, while a bond is a pure debt with a return on the loan amount.