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A debt instrument is a contractural or written assurance to repay a debt. A debt instrument can be a promisory note, a bill of exchange, a bond or other such instrument. A debt instrument may also be referred to as an instrument of indebedness. In most cases a debt instrument can be sold, traded, or otherwise used as a form of currency or barter, with the debt owed to the debt instrument's current holder. A debt instrument backed by a government agency -- such as a U.S. Treasury Bond -- or a highly-rated corporate bond with a fixed dollar payment may be defined as an asset. Defaulting on a debt instrument may result in the loss of the pledged collatoral, or in a reduction of the credit rating of the entity which issued the debt instrument. |
