Võlakirjabörs

Võlakirjabörs is the Estonian term for a bond exchange or bond market. It is a marketplace where various types of debt securities, known as bonds, are bought and sold. These bonds represent loans made by investors to issuers, which can be governments, municipalities, or corporations. The primary function of a võlakirjabörs is to provide liquidity for these debt instruments, allowing investors to trade them before their maturity dates.

On a võlakirjabörs, prices of bonds fluctuate based on factors such as prevailing interest rates, the creditworthiness of the issuer, and the overall economic climate. Investors purchase bonds with the expectation of receiving regular interest payments (coupons) and the return of the principal amount at maturity. The exchange facilitates the price discovery process and ensures transparency in bond trading. Estonia's main stock exchange, Nasdaq Tallinn, also operates a market for debt securities. Trading on a võlakirjabörs can be conducted by institutional investors, such as banks and investment funds, as well as by individual retail investors. The existence of a functional bond market is crucial for capital raising and for providing investment opportunities beyond equities.