Bund

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DEFINITION of 'Bund'

A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury bonds. The German government uses bunds to finance its spending. Long-term bonds are the most widely issued, with billions of euros' worth outstanding, and these come in 10- and 30-year durations.

INVESTOPEDIA EXPLAINS 'Bund'

Similar to U.S. Treasuries, bunds are auctioned off in the primary market and traded in the secondary market. They can be stripped, meaning their coupon payments can be separated from their principal repayments and traded individually. Bunds pay interest and principal three times a year.

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