Bullet Bond

A bullet bond is the vanilla bond structure: you receive regular coupon payments, and the entire principal is repaid at maturity in one balloon payment (the 'bullet'). Most corporate and government bonds are bullets. Contrast with amortizing bonds (like mortgages), where principal is repaid gradually over time, or sinking fund bonds, where the issuer retires portions early. Think of it as borrowing for a house with interest-only payments and a giant final payment: you pay interest every period, but the loan balance stays constant until the end. Bullet bonds have higher reinvestment risk (you get a big chunk of cash at maturity that must be reinvested) but simpler cash flow modeling and duration calculation.