Bonds may be fixed rate or index linked

Conventional bonds will be issued with a fixed coupon rate so there are known payments to be made by the borrower to the investor. Fixed coupon bonds represent the majority of bonds issued. Some issuance is index linked, so that the borrower's payments change in line with the chosen index-often a consumer price index. For many institutional investors, this can be attractive because their liabilities may also be index linked, so these bonds create a better match between payments received from the bond and its liabilities.