Types Of Bonds

Secured and Unsecured Bonds:

Secured bonds are endorsed by a oblige of some sort of Collateral. Mortgage bonds are secured by an assert on real estate. Collateral trust bonds are secured by stocks and bonds of other corporations. Bonds not endorsed by collateral are unsecured. A debenture bond is unsecured. A “junk bond” is unsecured and also very hazardous, and therefore, pays a high interest rate. Companies often use these bonds to finance supplemented buyouts.

Term, Serial Bonds and Callable Bonds:

Bond issues that full-blown on an individual date are called term bonds, issues that full-blown in installments are called serial bonds. Serially full-blowning bonds are frequently used by school or sanitary districts, municipalities, or other local taxing bodies that receive money through a special charge. Callable bonds give the issuer the right to call and retire the bonds anterior to maturity.

Convertible, Commodity-Backed and Deep-Discount Bonds:

If bonds are exchangeable into other securities of the corporation for a specified time after issuance,
they are convertible bonds. Two types of bonds have been developed in an attempt to attract capital in a tight money market—commodity-backed bonds and high-discount bonds. Commodity-backed bonds (also called asset-linked bonds) are redeemable in measures of a commodity, such as barrels of oil, tons of coal, or ounces of rare metal.

Registered and Bearer (Coupon) Bonds:

Bonds issued in the name of the possessor are registered bonds and require surrender of the certificate and issuance of a new certificate to complete a sale. A bearer or coupon bond, however, is not recorded in the name of the possessor and may be transferred from one possessor to another by simple delivery.

Income and Revenue Bonds:

Income bonds pay no interest unless the issuing company is gainable. Revenue bonds, so called because the interest on them is paid from specified revenue mediums, are most frequently issued by airports, school districts, counties, toll-road authorities, and governmental bodies.