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War Bonds Explained

We have got really good feedback on our warbonds initiative, but it seems that some players are confused about how they actually work.

I will try and explain the mechanics here and give a few examples. Financial mechanics can be very complex and if you have never looked at this stuff before it’s perfectly fine to be confused.

To start I will clarify one thing. If we have to reset the servers, you get everything you bought refunded as gold (charcters, weapons etc.) except the warbonds. You will KEEP the warbonds until they expire (6 months) and then we will pay back the gold.

This article will be available on our wiki too (and updated if stuff are added or changed).

Quick Explanation of the Warbonds


A Bond is a financial ‘instrument’. It is bacially a loan, where the  bond issuer (in this case, Reto-Moto) borrows money from the bond holder (in this case, the player). The actual bond is a piece of paper that proves that the bond issuer owes money to the bond holder. In the real world this piece of paper (today its just a number in a database not a piece of paper) can be traded on the stock-exchange. In Heroes&Generals, technically the bond is the same as an item or weapon. Once you bought it you have it. At this time we keep warbonds in the database, so don’t worry about you loosing them.

A War-Bond is a special kind of bond, that is issued by governments with the purpose of financing a war. They are usually somewhat restricted (they cannot be traded for example) because they also serve as a way for the government to keep inflation in check while the state is unstable (war brings uncertainty).


Interest of 11%

It is not free to borrow money (those of you who have a house mortgage knows what I’m talking about) so the bond issuer will have to pay a price for the loan. The price is called the interest or the coupon (back in the old days the bond had actual paper coupons attached to them and the bondholder could go to a bank and exchange the coupon for money). The interest is usually a percentage of the loan payed with fixed intervals (in our case, 1 payment each month). The interest is payed by the bond issuer until the bond expires.

It is the bond issuer that decides the interest. In the real world the interest is taken as a measure of risk. The higher the interest the higher the risk. Look at the European markets. Danish State Bonds are (as of time of writing) 1.64%, Denmark is a very very financially stable country (AAA). The Spanish State Bonds are close to 6% which is terrible. 6% might not sound like alot but when we’re talking state bonds we’re talking huge piles of money. As a rule of thumb, a country that gets above 7% is bankrupt, because the interest payments exceed what the country can earn. This is a vicious cycle, because investors start to panic demanding an even higher interest to lend money to the country, which again leads to more investor panic… In the danish press investors are often referred to as ‘hysteriske kællinger’ (translates to ‘hysterical bitches’) ;-)

In the more risky part of the investment spectre is the High-yield Bond (or Junk Bond). These usually have a high interest due to the increased chance of the bond issuer not being able to repay the bond involved. Some skilled investors make enormous amounts of money picking out the few good ones.


This Warbond expires after 6 months

When the bond expires (or matures as it is called) the bond issuer will pay back the loan to the bond holder (in our case you will get your gold back in 6 months). The length of time until the bond matures can be anything. In real life the maturity is most often between 1 year and 30 years. In a game like H&G it is not practical to have maturity for that long (who knows where the game is in 30 years ;-), so we’ve decided that the first batch will have maturity of 6 months.

In real world markets, bonds with short maturity dates (1 year) are often used more as ‘money market instruments’ than actual bonds. This means they are used to ‘correct’ pricing and ‘quality’. In H&G you cannot trade your warbonds to other payers (eventhough it would be interesting to be able to do that some time).

Some bonds grants the issuer the right to ‘call’. This means that the lender can at any time choose to repay his loan. We do not have that option so you will keep your bonds until the expiration date.

Nominal Value

This bond is worth 1000G

The value of the bond, called the Nominal Value (or face value because it’s the value actually written on the bond). This is the amount of money that the bond issuer will have to pay back to the bond holder when the bond expires. Our first series of warbonds have the Nominal Value of 1000G. We might issue new bonds with different values in the future.

Sometimes the Nominal Value is set really high if the issuer only want heavy financial institutions to buy their bonds. Some old companies also practice this with their stock. Keeping few stock at a high price ensures that the buyers are somewhat serious

Issue Price

This bond costs 955G

When the bond is first offered to buyers it might have a different price than the Nominal Value, this price is called the issue price (in our example it is the number of gold the player pays for a warbond).

The issue price is sometimes set lower than the nominal value in order to attract buyers. When the bond is traded on a stock exchange the issue price is variable. It becomes a measure of the risk involved in the bond. Low price means high risk. You can think of it as the bondholders chance of getting his money back at expiration. If he wants his money before expiration he can sell to another buyer but at a discount.

Sometimes the issue price is higher than the nominal price. This might sound weird, but it reflects very secure investments and in this case the higher price reflects the compounded interest for the entire duration. The Danish state bond that expires in 2039 with the interest of 4,5% have an issue price of 142dkk for a bond with the nominal value of 100dkk. This again reflects that investors are very confident that the state of Denmark is able to repay it’s dept. It is considered a ‘safe haven’ for investors to place their money while the rest of the marked is in turmoil.

Still Confused?
If you want to read a bit about historical war bonds, you can start with this article about series-E bonds (US Warbonds) or a general description of warbonds.

You can always read about this on the wiki, where the info will be updated when we make changes.


  1. 1Shot1Kill1Shot1Kill04-29-2012

    The question remains:
    Do you get any gold or credits from the warbonds when the game goes to BETA or release?
    If not I think it’s a more valuable option to just buy regular Gold and keep it.
    This also gives some money to the developers and I get to keep it for future use.
    I think I speak for many when asking:
    How is gold/credits/warbonds transfered to later stages of the game?

    • Reto.RedBjarneReto.RedBjarne04-29-2012

      When the game goes into Beta you will keep your warbonds and keep earning interest.
      The bond runs for 6 months no matter what.

  2. xIvSlow420xIvSlow42004-29-2012

    Absolute genius,bravo……….now use those dollars to raise the server numbers:)

  3. mouseofpainmouseofpain05-29-2012

    Will the accounts be reset when the full game launches?

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