Bond Market - The Magic of the Bond Market

Just as companies need to borrow money, so do governments. And governments do it through the bond market. Lending 200 million to one person or company is basicly a big risk for the lender. But what if makrosoft has to borrow a thousand dollars instead? If something happens and they can't pay you back, losing a thousand bucks is a much smaller risk. This allows the lenders to spread their risk and be more willing to lend in the first place.