Investment
What is a public bond ? Definition and how it works in 2026
A public bond is a 2026 debt security issued by governments to fund projects, offering investors fixed interest and capital security.
Summary
The essentials in 30 seconds
We often hear that "finance is complicated." Yet, when Duralex invited the public to join its revival, thousands of French citizens understood the stakes perfectly. They lent a little money, earned interest in return, and supported a company they’d known for years. This simple, concrete mechanism is called a public bond. And contrary to popular belief, it is far more accessible than it seems.
According to the Bank for International Settlements, the global bond market was valued at over $130 trillion in 2024, making it the largest financial market in the world—even ahead of stocks. Yet, for decades, it remained the private playground of institutional investors. That is no longer the case. The rise of regulated crowdfunding platforms has opened the door to individuals. Since 2021, the European Crowdfunding Service Providers (ECSP) regulation has specifically governed these transactions, making them accessible to all European residents. Democratization is underway, and projects like Duralex or Galeon are its most tangible symbols.
In this article, we explain what a public bond is, why this format is making a comeback, how to evaluate it as an investor, and which limitations to keep in mind.
What is a bond, exactly ?
A bond is a loan. It’s as simple as that. When you buy a bond issued by a company, you are lending them money. In exchange, the company contractually agrees to pay you regular interest (the coupon) throughout the duration of the loan, and then to reimburse your capital at maturity.
Three elements define a bond:
- The amount : The sum you lend (often accessible from just a few hundred euros for public bonds).
- The interest rate : The annual coupon expressed as a percentage, fixed in advance and guaranteed by contract.
- The maturity : The duration of the loan and the date the capital is repaid.
"A bond is the opposite of speculation: you know exactly what you are going to receive, and when. It is savings with a contract."
How does a bond differ from a stock ?
The two are often confused, but the difference is fundamental. When you buy a stock, you become a shareholder—a co-owner of a company. Your return depends on the company's performance and the stock price on the market, two unpredictable variables. When you buy a bond, you are a creditor—you have lent money. Your return is contractually fixed from the start and does not depend on the company's profits.
In the event of bankruptcy, creditors (bondholders) are repaid before shareholders. A bond is therefore structurally less risky than a stock, even if it is not risk-free.
What makes a bond "public"?
The word "public" refers to the accessibility of the offer, not the status of the issuer. A public bond is simply a bond open to all individuals, regardless of wealth or professional investor status.
Historically, this type of issuance was reserved for States (French OATs, US Treasury bonds) and large public entities. However, European regulations now allow private companies to issue bonds directly to the general public, provided they follow a strict framework: publication of a prospectus validated by the AMF (the French financial markets authority) or its European equivalent, clear information on risks, and regulated collection caps.
"A public bond is not a financial product reserved for the wealthy or experts. It is a 'citizen loan,' governed by law, accessible via an online platform with just a few hundred euros."
Why has the Duralex case become a symbol?
Duralex, the French glassware company founded in 1945 and famous for its "unbreakable" glasses, went through a judicial restructuring in 2024. To finance its industrial renewal, the company chose an unusual path: rather than relying solely on banks or investment funds, it offered a public bond directly to citizens.
The result exceeded all expectations: the funding goal was reached in less than three days. Thousands of French people subscribed—often not for purely financial reasons, but because they knew the brand, understood the project, and wanted to play a concrete part in its survival.
What the Duralex operation demonstrated is structural: when a project is understandable, when the brand inspires trust, and when the mechanism is simple, individuals are ready to become direct players in financing the real economy. No more need for intermediaries. Finance becomes tangible again.
Government bonds, shares, tokens or savings accounts : how do they compare for investors?
What are the limitations of a public bond?
This investment format offers real advantages, but it also carries risks that a serious investor should not underestimate.
Limitation 1 : Issuer default risk
If the company that issued the bond cannot repay (due to bankruptcy or liquidation), you could lose all or part of your capital. Unlike a bank savings account, there is no State guarantee on private company bonds. Analyzing the issuer's financial strength is therefore essential before subscribing.
Limitation 2 : Investment illiquidity
Unlike a listed stock that you can resell at any time, a public bond is generally locked until its maturity date. If you need your capital before the scheduled date, early exit options are limited—or even non-existent depending on the terms of the issuance.
Limitation 3 : Inflation can erode real returns
A fixed interest rate of 6% over 5 years is attractive if inflation is at 2%. It is much less so if inflation exceeds that rate during the loan period. The displayed nominal yield is not the real yield—an essential distinction in a high-rate environment.
Limitation 4 : Dependence on project quality
The strength of a public bond—its link to a concrete and understandable project—is also its main limitation: if the project fails or if the company faces major difficulties, the promise of repayment may be compromised. Reputation and brand name are not financial guarantees.
"A public bond is not a risk-free investment. It is a tool for financing the real economy—accessible and transparent—but one that requires a serious analysis of the project's strength before committing."
FAQ : Frequently asked questions about public bonds
How does a public bond work in practice?
You subscribe on a regulated platform by lending a defined sum to a company. The company commits to paying you interest at regular intervals (usually annually) throughout the duration of the loan, and then reimbursing your capital at maturity. Everything is contractualized in a prospectus validated by the relevant regulatory authority.
What is the difference between a bond and a savings account?
A savings account (like the French Livret A or LDDS) is guaranteed by the State up to €100,000 and available at any time. A bond is a loan to a private company, not guaranteed by the State, with capital locked until maturity. In exchange, the interest rate on a bond is generally higher than that of a regulated savings account.
Can you lose money with a public bond?
Yes. If the issuer goes bankrupt before maturity, you could lose all or part of your capital and the remaining interest. This is why analyzing the financial health and the project of the issuer is essential before subscribing.
Why do companies sometimes prefer bonds over bank loans?
A public bond allows a company to diversify its funding sources, partially bypass banks (and their conditions), and mobilize its community around its project. It is also a powerful communication tool: subscribers naturally become ambassadors for the project.
What is the ECSP regulation and why is it important?
The European Crowdfunding Service Providers (ECSP) regulation, in effect since 2021, governs platforms that offer public bonds to individuals. It imposes obligations regarding information, transparency, and risk management, strengthening the protection of individual investors across Europe.
What is the link between public bonds and Galeon?
Galeon launched a public bond program to finance its deployment in new hospitals. This mechanism allows any individual investor to contribute directly to the development of concrete medical infrastructure, with a fixed interest rate set in advance and a clear regulatory framework.
Conclusion
A public bond is a simple, predictable, and regulated financing mechanism: you lend money to a company, it pays you contractual interest, and it reimburses you at maturity. Its "public" dimension means the offer is open to all individuals, without specific investor profile requirements. The Duralex case popularized this format in France by demonstrating that a well-known brand and an understandable project could mobilize thousands of citizens in just a few days.
This format presents real benefits: predictable returns, a direct link to the real economy, and high accessibility. However, it also involves risks that should not be overlooked: default risk, illiquidity, and potential erosion by inflation. Analyzing the project and the issuer's financial strength remains paramount.
Galeon applies this mechanism to finance its hospital deployment. Investing in Galeon bonds means directly financing the expansion of a medical infrastructure already present in 19 hospitals—with the transparency of a contract and the impact of a public health project.
To go further : discover Galeon's bond program on the Atlantis platform below.
