income bond

(redirected from Income Bonds)
Also found in: Dictionary.
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 ?
The income bond pays 1.15 per cent gross, again with no notice of withdrawal and no penalty but with a maximum of PS1 million.
Existing customers who have maturing Guaranteed Growth Bonds and Guaranteed Income Bonds are able to renew their investment and reinvest the full value of their holding into these issues.
The changes see a 1% rate on NS&I's Direct Isa fall to 0.75%, a 0.8% rate on its Direct Saver fall to 0.7% and a 1% rate on Income Bonds fall to 0.75%.
Maturity date of the income bonds *** 31 December 2015 ***
Many insurers are shying away from both common and preferred stocks in the wake of the financial crisis, seeking refuge instead in fixed income bonds.
She leads an organisation that deals in National Saving Certificates, Premium Savings Bonds, ISAs, Savings Accounts, Investment Accounts, Guaranteed Income Bonds and other products.
Income bonds, paying monthly interest, offer 4.15%, 4.30% and 4.5% over two, three and five years (lower figures due to the complexities of compound interest).
The group's income bonds, investment accounts and easy access savings accounts will all have their returns cut by 0.25%.
ACONSIDER High Income Bonds currently offering up to 8 per cent p.a.
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. This approach means the investor is never concentrated in one maturity.