guaranteed bond(redirected from Guaranteed-Income Bonds)
A bond on which payment is guaranteed by a third party such as a government or a bond insurance company. A guaranteed bond is doubly protected because it is payment can come either from the issuer or from the third party in case the issuer defaults. As such, a guaranteed bond is low risk and therefore usually carries a lower coupon rate than an uninsured bond or other bond without a guarantee. A bond guaranteed by the U.S. government is generally thought to be riskless.
A bond that is issued by one firm and guaranteed as to interest and principal by one or more other firms. Such bonds, often resulting from joint ventures, are particularly common among railroads that lease tracks to and from each another.