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This IOU is their promise to repay both your principal (the amount you lend) and a fixed amount of interest for allowing them to borrow your money.
So what are we talking about in real terms? Say you were to lend someone $1,000 for 10 years and charge them 9% interest annually for borrowing your money. Well, if your loan is a bond, then the $1,000 you lent is the face value of the bond (also called "par value"); the yearly 9% interest payment is the coupon; and the length of the loan, 10 years, is the bond's maturity. At the end of ten years you will have earned $900 in interest and will get your initial $1,000 investment back...
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