LEGAL GLOSSARY
Bond
A bond is a long-term debt instrument issued by the issuer as debtor, containing the undertaking that the principal will be repaid to the investor at maturity or in installments. Under the Communiqué on Debt Instruments of the Capital Markets Board (SPK), debt instruments with a maturity of 365 days or more are deemed bonds; shorter-term instruments are regulated under separate names such as financing bills. The bondholder is not a shareholder of the issuer but its creditor; the return is mostly provided by interest or coupon payments.
Scope
Article 3/1-m of the Communiqué on Debt Instruments (VII-128.8) defines a bond as a debt instrument with a maturity of 365 days or more; the same article also lists among debt instruments the convertible bond, exchangeable bond, financing bill (finansman bonosu) and precious metal bill. Article 3/1-o of Capital Markets Law No. 6362 (SPKn) deems debt instruments securities.
In joint-stock companies, bonds and other debt instruments, unless otherwise provided by law, are issued by resolution of the general assembly (Turkish Commercial Code (TTK) Art. 504); the general assembly may delegate this authority to the board of directors for a period limited by law (TTK Art. 505). For issuers subject to capital markets legislation, the authority to issue debt instruments may be delegated to the board of directors by the articles of association for a limited or unlimited period, and the issue amount is subject to the limits set by the Capital Markets Board (SPK) (SPKn Art. 31).
Practical significance
If the bond is to be offered to the public, a prospectus approved by the Board is required; if it is to be sold without a public offering, an issue document is required (SPKn Art. 4, 11). For the investor, the main risk is that the issuer cannot pay at maturity; the issuer’s financial position, its credit rating, if any, and the security structure are therefore important. If the issuer does not fulfill its payment obligation on the debt instrument, the document that the Central Registry Institution (Merkezi Kayıt Kuruluşu) gives to the rights holders is deemed one of the documents listed in Article 68/1 of Law No. 2004 on Enforcement and Bankruptcy (SPKn Art. 31/4); this facilitates matters for the creditor at the stage of definitive removal of the objection in enforcement proceedings.
Commonly confused concepts
A bond differs from a share (stock certificate): a shareholder is an owner of the company and participates in profit; the bondholder is a creditor of the company and, as a rule, claims the agreed payment independently of whether the company makes a profit. A bond differs from a financing bill, which has a shorter maturity, with respect to maturity. A promissory note (bono) in commercial law, on the other hand, is a negotiable instrument (kambiyo senedi); SPKn Art. 3/1-o excludes the promissory note, together with the check and the bill of exchange, from the definition of securities.
Sources and scope
- Presidency of the Republic of Türkiye, Legislation Information System (Mevzuat Bilgi Sistemi) — Capital Markets Board Communiqué on Debt Instruments (VII-128.8) · Art. 3/1-b, c, m(accessed: September 24, 2026)
- Presidency of the Republic of Türkiye, Legislation Information System (Mevzuat Bilgi Sistemi) — Law No. 6102, Turkish Commercial Code · Art. 504–506(accessed: September 24, 2026)
- Presidency of the Republic of Türkiye, Legislation Information System (Mevzuat Bilgi Sistemi) — Law No. 6362, Capital Markets Law · Art. 3/1-o; Art. 31(accessed: September 24, 2026)
The explanation is for general information; a specific case must be assessed separately.