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Various Types of Bond Issues

In: Business and Management

Submitted By minja1124
Words 291
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- Compare and contrast the various types of bond issues. .

There are several different types of bond issues:
Secured and Unsecured Bonds – Secured bond is backed by collateral, such as a mortgage or lien. The most common secured bonds are mortgage bonds which are backed by real estate or physical equipment that can be liquidated. Unsecured bond issue is backed only by the creditworthiness and reputation of the issuer, and not by any pledged asset.

Term, Serial and Callable Bonds – Term bond issues are bonds which mature on a single date. Serial bond issues are bonds which mature in installments. Callable bond issues are bonds which the issuer the right to call and retire bonds prior to maturity.

Convertible, Commodity-Backed, and Deep-Discount bonds – Convertible bond issue is a bond that can be converted into a predetermined amount of the company's equity at specified times during its life. A commodity-backed bond is an investment term referring to a type of bond whose value is directly related to the price of a specified commodity such as barrels of oil or tons of coal. Deep-Discount bond issue is a bond that is selling at a discount from par value and that provides the buyer’s total interest payoff at maturity.

Registered and Bearer Bonds – Registered bonds are bonds that are issued in the owners’ name. Unlike Registered bonds, Bearer or Coupon bonds are not issued in owners’ name and can easily be transferred from one owner to another.

Income and Revenue Bonds – Income bonds don’t owe any interest payments unless the issuing company is making profit. On Revenue bonds the interest is paid from specified revenue sources and it is mostly used by airports, schools and some other government

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