Bonds. The risks
Issuer is not able to pay the interest
Issuers have to pay interest to bondholders and banks before they pay dividends. That makes them less risky than shares (equity) in the same company.
In order to ensure that they can make debt payments, companies will stop spending in other areas first. They may slow R&D spend, or they might cut back on advertising or marketing.
If the company really cannot pay the interest, the company is said to be "in default". Usually, if this happens then the company will talk to bondholders about alternative payment scenarios.
Markets close and the Issuer cannot repay the bond at maturity
Generally, an issuer will look to refinance the bond ahead of time. It's the same as refinancing a mortgage that's coming to its end.
By refinancing months (sometimes years) ahead of time, the issuer seeks to reduce the risk of not being able to refinance on the bond's maturity date.
The unexpected can happen. Suppose the bond markets shut suddenly because of a global event. A company needing to refinance a maturing bond may ask investors to continue to hold the bond on the same terms until the markets re-opened.
Bond issuer is unable to refinance the bond
If a bond issuer is unable to refinance its bond at or before maturity then there is the risk that you may not get paid back some or all of your money.
A company in this situation will most likely be failing for some reason or it may be viable, but it may have taken on too much debt.
In this situation, there may be a corporate re-structuring event. There will be an assessment of whether the company can go on and if so, on what terms. As an example, bondholders might be asked to convert some of their debt into equity.
It's important to know that lending money whether you're a bank or a bondholder involves risk. You bear the risks that the bond issuer may not be able to pay you the interest or that it cannot repay you at maturity. And like shares, the prices of bonds goes up and down depending on demand. If you must sell when the price is below what you paid for it, you'll lose money.