income bond

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Related to Income Bonds: Convertible bonds

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.
References in periodicals archive ?
Man Synergy Ltd intends to pay a coupon to the holders of income bonds amounting to seven per cent of the face value of the bonds, subject to sufficient trading capital being available.
The group's income bonds, investment accounts and easy access savings accounts will all have their returns cut by 0.
ACONSIDER High Income Bonds currently offering up to 8 per cent p.
DE A: Yes, products called guaranteed or secure income bonds can provide this security.
LATEST cut in rates at National Savings & Investments makes Guaranteed Income Bonds over two and five years a better buy, promises Essex-based Baronworth Services.
As time passes and the first bond matures, the client can invest in another 10-year bond and continue this cycle as long as he or she wants to hold domestic fixed income bonds.
The Wizard prices both accrual bonds (Series I, EE, E and savings notes) and current income bonds (Series HH and H).
Some products such as High Income Bonds might give your income a big short-term boost but they won't generate a rising income.
Or consider one of the guaranteed income bonds offered by large insurance companies.
Savings with NS&I are 100% safe for total amounts up to PS2million in its Direct Saver and PS1m in its Investment Account or Income Bonds as it is backed by the Treasury.