Bonds are so-called securitised promises to repay (IOUs) through which its issuer obtains a loan in the capital markets. The credit terms (terms and conditions of the bond), such as the interest rate, the maturity or the repayment, are fixed on the issue date. In the case of fixed interest-bearing bonds the interest rate is constant throughout the term, in the case of variable interest-bearing bonds it is adjusted periodically in accordance with the terms and conditions of the bond.
On maturity the bonds are normally repaid at 100%. During the term prices can fluctuate because the price of the security is adjusted based on the relevant interest rates prevailing in the market.