Unsecured bond

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Unsecured Bond

A debt security, issued by a government or large company, that is not secured by an asset or lien, but rather by the all issuer's assets not otherwise secured. That is, an unsecured bond carries no collateral; in case of bankruptcy, the bondholder is considered a general creditor. Thus, the bondholder is paid out of funds that do not have a prior claim on them with a secured debt. Like most bonds, an unsecured bond can be traded. Some unsecured bonds, such Treasury securities, are considered risk-free. See also: Debenture.

Unsecured bond.

When a bond isn't backed by collateral or security of some kind, such as a mortgage, that can be used to repay the bondholders if the bond issuer defaults, the bond is described as unsecured.

However, most unsecured bonds pose limited risk of default, since the companies that issue them are usually financially sound. Unsecured bonds are also known as debentures.

References in periodicals archive ?
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aACAo Series 157 JPY10 billion domestic senior unsecured bond, due 24 July,
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Securities and Exchange Commission, assigned a 'AA' long-term rating to North American Development Bank's (NADB) eight-year Swiss franc unsecured bond issuance.
Summary: Mumbai (Maharashtra) [India], Jan 19 (ANI): Indian steel-making company, Tata Steel on Friday announced that it has raised USD 1.3 billion by issuance of unsecured bonds in the international markets.
Glenmark Pharmaceuticals Ltd is looking to secure $200 million by issuing USD denominated non-convertible unsecured bonds to pay back curren debt.
has assigned its 3 rating to the Development Bank of Japan Inc's (DBJ) senior unsecured bonds. These are domestic yen bonds issuance which do not carry the government guarantee.
31 January 2012 - Italian bank Intesa Sanpaolo SpA (BIT:ISP) is reportedly marketing senior unsecured bonds denominated in euro, which will be due in 18 months, Bloomberg said on Tuesday, citing a banker participating in the deal.
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M2 EQUITYBITES-June 28, 2018-Catella amends terms and conditions for senior unsecured bonds