Bond Types
Bond Types
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Kinds of Bonds
A number of different kinds of bonds offer variations on this basic formula. Some types of bonds provide alternative interest structures
. A zero-coupon bond does not make periodic interest payments. The bondholder realizes interest by buying the bond substantially below its face value
. A floating-rate bond has an interest rate that is changed periodically according to an established formula. There also may be provisions that allow either the issuer or the bondholder to alter a bond's maturity date
. A callable bond entitles the issuer to pay off the principal prior to the stated maturity date. Similarly, the owner of a putable bond can force the issuer to pay off the principal before the maturity date
. A convertible bond gives the bondholder the right to exchange the bond for shares of the issuer's common stock at a specified date. (1)
Bonds in this Section
Bonds in the American global law platform (publication)
Resources
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Notes and References
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