Parity Bond

Parity Bond

A bond with an equal claim on some right as another bond. A new issue of a bond may be issued as a parity bond, which indicates that it carries the same rights as bonds already issued. For example, unsecured bonds are all parity bonds with respect to each other; this means that no one bond has a prior claim to a coupon over any other. However, all unsecured bonds are junior to any secured bonds, which are likewise parity bonds, with respect to other secured bonds. See also: Pari passu.
References in periodicals archive ?
Management reports that no bank 'put' is allowed at 10-year fixed-rate interest reset points and that debt terms are consistent with parity bond covenants.
The HRB resolution pledges to the parity bonds all the mortgages in the loan portfolio (other than those made or purchased from stand-alone bonds) consisting of multifamily (currently approximately 97%), single family (currently one loan) and group homes (currently approximately 3%) as well as the additional funds pledged under the legal provisions of the resolution.
These parity bonds can be issued only if certain financial tests described in the bond ordinance are met.
The additional bonds test protects the holders of existing bonds when the utility issues additional parity bonds by requiring minimum coverage levels.
Although the airport has indicated plans to issue additional parity bonds to fund elements of its CIP (primarily the terminal expansion), the funding sources are too preliminary at this time to include in Fitch's forecasts.
In addition, Fitch affirms the 'AA' ratings on the following outstanding parity bonds:
The county anticipates issuing up to $630 million in additional parity bonds (inclusive of the series 2018 bonds) over the next five years to finance a portion of the cost of completing the PTP.
Including prospective debt service on the current obligation, approximately $6.7 million in maximum annual debt service is expected from all parity bonds. No additional bonds are authorized under current law and none are currently expected.
For additional parity bonds to be issued, historical sales tax revenue bond tax fund receipts must cover future maximum annual debt service (MADS) on all state sales tax revenue bonds by at least 2.0x.
Also pledged is revenue from a special real property tax, unlimited as to rate or amount and levied in an amount to pay debt service on GO and parity bonds.
It has upgraded the following to 'A+' from 'A': -- Approximately $525 million of Norton's Louisville-Jefferson County Metro Government, KY health system revenue bonds (series 2016A); and --Norton's parity bonds issued by the Louisville-Jefferson County Metro Government and the Kentucky Economic Development Finance Authority (various series).