Sovereign Debt
a.k.a. Government debt, Public debt
Money a national government owes, usually in the form of bonds sold to investors.
Sovereign debt is what a country's government has borrowed. It mostly takes the form of government bonds: US Treasuries, UK gilts, German Bunds and so on. Investors lend to governments because they are usually the safest borrowers in their own currency.
Trouble starts when markets doubt a government can or will pay. Yields shoot up, the currency can wobble, and a crisis may follow, as in Greece in 2010–2012. Debt levels, often measured by debt-to-GDP, and credit ratings are watched for early warning signs.
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