Learn what bonded debt means and how it differs from other types of borrowing on a company or government balance sheet.
Bonded debt is debt raised through the issuance of bonds rather than through bank loans, trade credit, or other borrowing channels. It can refer to corporate, municipal, or sovereign bond obligations.
Bonded debt matters because it usually involves standardized securities held by many investors, tradable in secondary markets, with formal coupon, maturity, and covenant structures. That makes it different from bilateral lending relationships.
A city may finance infrastructure by issuing municipal bonds. Those obligations form part of its bonded debt and can be tracked separately from shorter-term notes or direct bank borrowings.
A manager says, “All debt is bonded debt once it appears on the balance sheet.”
Answer: No. Bonded debt specifically refers to debt raised through bond issuance.