Treasury-Debt Instruments

A debt instrument is any financial tool used to raise capital. It is a documented, binding obligation between two parties in which one party lends funds to another, with the repayment method specified in a contract. Some are secured by collateral, and most involve interest, a schedule for payments, and time frame to maturity if it has a maturity date.

Types of Debt Instruments
Debt is typically a top choice for raising capital because it comes with a defined schedule for repayment. This comes with less risk for the lender and borrower, which allows for lower interest payments. Debt securities are a more complex debt instrument involving greater structuring. If a business structures its debt to obtain capital from multiple lenders or investors through an organized marketplace, it is usually characterized as a debt security instrument. These are complex, as they are structured for issuance to multiple investors.

Some common debt security instruments are:
- U.S. Treasury Bonds
- Municipal Bonds
- Corporate Bonds