Legal Definitions - debt instrument

A debt instrument is a written agreement that promises to repay a debt. This can include:

• Promissory notes
• Bills
• Bonds
• Commercial paper

For example, if you borrow money from a friend and write a promissory note stating that you will repay the loan within a certain timeframe, that note is a debt instrument. Similarly, if a company issues bonds to raise money, those bonds are debt instruments.

Debt instruments are important because they allow individuals and organizations to borrow money and raise capital. They also provide a way for investors to earn a return on their investment by lending money to others.