Tradable Debt Instrument

Definition

Tradable Debt Instrument. A Debt Instrument that is also a Security, i.e., that can be bought and sold by the holder

A debt instrument can be traded, if

• its features depend only on a defined borrowing entity
• the instrument has no bilateral or multilateral obligations
• the instrument is transferable (the investor can easily transfer it to another investor without asking the borrower (except the terms prohibit this explicitly)
• there is market to facilitate buy/sell transactions

Tradeability is simplified with securitised instruments, where the debt is already split into handy denominations which trade easily (e.g. in round thousands or millions as with bonds, commercial paper, etc.). But in principle it works also with interbank loans and similar instruments.

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.