Date Posted: 8/31/2012 5:39:28 AM
Posted By: moff J Membership Level: Silver Total Points: 485
A bond is a financial security that carries a fixed rate of return and is used by companies to raise large amounts of money.There are various types of bonds that an issuer can offer:1.Secured bonds- these are backed by some collateral which the bond holder can claim in case the issuer defaults in the bond contract.2.Unsecured bonds/Debentures- these are not backed by any security. They are therefore very risky and because of this they pay high interest rates.3. Collateral bonds- these are bonds backed by financial securities such as bonds and stocks held by the issuer in other companies.4. Callable bonds- these refer to bonds which can be recalled by the issuing institution before the date of maturity.5. Income bonds- their interest is paid only if a company makes a profit6. Revenue bonds- these are bonds whose interest is paid from specific revenue sources.7. Mortgage bonds- these are backed by a claim on a real estate.8. Commodity backed bonds- these are bonds which can be redeemed for commodities such as company's products.9. Convertible bonds- are bonds that can be converted into other securities such as share stock within a specified period after issuance.10. Term bonds- they refer to bonds which mature at a specified future date.11. Serial bonds- they mature in installments.12. Registered bonds- they are the bonds which are registered in the name of the owner. In case of sale, the bond holder certificate has to be submitted and a new one reissued.13. A bearer/coupon bond- is not registered in the name of the owner and may be transferred to a new party by mere delivery.
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