Bonds and other financial instruments
5 minute read
Some transactions on IGT involve financial instruments — the sale or purchase of bonds, treasury notes such as Brazilian LTNs, and similar securities. This guide explains what these instruments are, how they typically work, and — most importantly — how to verify them through official sources before committing to anything.
What is a bond?
When you buy a bond, you are lending money to the issuer — a government or a company — until the maturity date, in return for periodic interest payments (called the coupon). At maturity, the issuer repays the face value of the bond.
Bonds are debt, not ownership: unlike shares, they do not make you a part-owner of the issuer. That is why they are generally considered more predictable — as long as the issuer remains solvent, you know what you should receive and when.
A simple example
Say Company XYZ issues a bond with a face value of $100, a 5% annual coupon paid every six months, and a 10-year term.
Each year you would receive two payments of $2.50 for every bond you own.
After 10 years you would get back the original $100 per bond. The coupons add up to $50 per bond over the lifespan — a 50% return over the 10-year period, provided the issuer never defaults.
The main types you may encounter
Government bonds and treasury notes
Issued by national treasuries — US Treasuries, UK gilts, or Brazilian LTNs (Letras do Tesouro Nacional, zero-coupon bills sold at a discount and repaid at face value at maturity). Debt of stable, developed countries is usually considered the lowest-risk end of the spectrum.
Corporate bonds
Issued by companies to raise capital. The safest are called investment grade; those at the risky end are high-yield ("junk") bonds — they pay a higher coupon because there is a real chance the issuer defaults.
Notes and bank instruments
Medium-term notes (MTNs), promissory notes and bank instruments such as standby letters of credit (SBLCs) or bank guarantees (BGs) also circulate in international trade. They are legitimate tools in the right hands — and, unfortunately, the favourite props of fraudsters. Treat any offer involving them with double the diligence.
Instruments in IGT transactions
Projects published on IGT may involve the sale or purchase of bonds, LTNs or other instruments as part of a broader business deal. In those partnerships, IGT provides the infrastructure — the workspace, electronic contracts with a full audit trail, invoicing and an assigned coordinator — but the transaction itself always happens between the parties.
IGT is not a stock exchange, broker-dealer or custodian, and does not list, sell, value or settle securities. Whether a given instrument can legally be bought or sold, and by whom, depends on the securities laws of the jurisdictions involved — when in doubt, involve a licensed securities professional before signing anything.
Verify before you trust
The single most important habit when an instrument appears in a deal: verify it through official sources, never through documents supplied by the counterparty alone.
Every genuine listed security has an ISIN (International Securities Identification Number) that can be checked in public databases such as the Luxembourg Stock Exchange search below. Confirm the issuer, the maturity and where the instrument is actually held in custody.
Be especially wary of "historical bonds" — decades-old Brazilian LTNs, pre-war bonds and similar papers offered at fantastic discounts with stories about secret redemption programmes. Courts and treasuries around the world have consistently treated these as worthless, and they are among the most common instruments of financial fraud. If a deal depends on one, walk away.
The main risks
- Default risk — the issuer becomes insolvent and stops paying.
- Inflation and interest-rate risk — rising rates make existing bonds worth less if you need to sell early.
- Liquidity risk — some instruments are hard to sell at a fair price, or at all.
- Counterparty and fraud risk — in private, over-the-counter deals, the document in front of you may simply not be what it claims to be. This is the risk due diligence exists for.
Where to read more and verify
Independent, official sources to learn more and check instruments before you commit:
Luxembourg Stock Exchange — security search
Look up listed securities by name or ISIN: issuer, maturity, listing status and documentation.
Tesouro Nacional (Brazil)
The official source on Brazilian treasury securities, including LTNs — how they work and how they are legitimately traded.
Investor.gov — bonds explained (US SEC)
Plain-English introduction to bonds and fixed income from the US Securities and Exchange Commission.
ICMA — International Capital Market Association
Standards and market practice for the international bond markets.
New to IGT?
Read our getting-started guide to understand how partnerships, contracts and coordinators work before your first deal.
Important information: This page is for general information only and is not investment, legal or tax advice, nor a recommendation to buy or sell any instrument. IGT is a marketplace that connects businesses — it does not list, sell, broker or hold securities, and it does not verify the authenticity of instruments referenced in projects. The value of financial instruments can go down as well as up, and outcomes are never guaranteed. Always conduct your own due diligence and consult a licensed professional adviser before transacting.