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Glossary

War bonds

Category — Bond Types
War bonds are debt securities issued by the government to finance military operations. In a broad sense, these are government loans from citizens of the country, due to the patriotic mood of the population, to cover expenses during the war.

As a rule, war bonds have a lower yield, so the state actively promotes investment in war bonds.
War bonds are often discounted and have a lower denomination than standard bonds, making them more affordable to the public.

On March 14, 1812, the United States issued the first war bonds in the world. $11 million was raised to finance the War of 1812. In 1917, the US government issued the Liberty bond and in 1941 the war bonds were renamed “the War bond”. In the US, war bonds were zero-coupon and sold at 75% of their face value for 10 years. A $25 bond was selling for $18.75.

In addition to the United States, Great Britain issued war bonds. These bonds were considered the best-selling instruments during the First World War. The bonds were perpetual and on March 9, 2015, after almost 100 years, the last issue of UK war bonds was redeemed: the United Kingdom, War Loan 3.5 perpetual, with close to £2bn in maturities and almost 120,000 investors at the time of redemption.

Besides the United States and Great Britain, war bonds were also issued in the USSR. In total, there were 4 issues during the war years for a total of 89 billion rubles.

In May 1940, Canada also began actively selling military savings certificates and "victory bonds" – debt securities that finance Canada’s military operations.

Countries like Germany, Austria-Hungary and Ukraine also issued war bonds to fund their war efforts.
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