What does it mean for a bond issuer to default? What will be an ideal

QUESTION

What does it mean for a bond issuer to default?

What will be an ideal response?

ANSWER

Answer: When a bond issuer defaults, it cannot make the scheduled interest payments on the bonds or repay the principal on the bonds.
Explanation: A bond issuer that defaults is unable to meet scheduled interest payments and repayment of principal on the bonds. The risk of default is used to determine the bond rating.