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Income Bond

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Income bond
A bond whose payment of interest is contingent on sufficient earnings. These bonds are commonly used during the reorganization of a failed or failing business.

Income Bond
A bond in which the issuer is only responsible for making coupon payments when it has sufficient income to do so. Income bonds are most common in reorganization plans in which the issuer is attempting to maintain operations in bankruptcy. An income bond is useful for the issuer because it provides capital quickly. However, it can be disadvantageous for the bondholder because there is little or no guarantee of repayment. As a result, income bonds are relatively rare securities.

income bond
A long-term debt security in which the issuer is required to pay interest only when interest is earned. This rare security, issued principally as part of a corporate reorganization, offers an investor a relatively weak promise of payment. Some issues require that unpaid interest be accumulated and made up in periods that earnings permit. Also called adjustment bond.


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Taxable products include savings accounts, income bonds, Guaranteed Equity Bonds, Guaranteed Growth Bonds and Guaranteed Income Bonds.
The third reason the rates on fixed rate and income bonds are higher is because they can hold on to our money for longer.
The guaranteed bonds are offered with a 100 per cent capital guarantee from Credit Suisse International and are designed to generate a higher capital return, while the income bonds will pay a non-discretionary, fixed annual coupon.
 
 
 
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