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 ?
Under a contingent guarantee provided by the sponsors, SCP's weak financial condition potentially exposes investors to the declaration of a technical event of default and an acceleration by the IFC; the unstructured unsecured bonds rank pari passu with the certificates and contain cross-default provisions.
REIT Unsecured bond issuance volume and terms have improved materially, with 62% of $6.
Financing alternatives to the unsecured bond market such as secured term facilities may also become more prevalent if new unsecured bond issuance pricing remains unattractive.
AS) has set pricing on its euro- denominated, benchmark-size, senior unsecured bond in the area of 225 basis points over mid-swaps.
XE) is set to price its EUR500m, senior unsecured bond, maturing on August 2015, at 200 basis points over mid-swaps.
VX) were book runners for the senior unsecured bond, which is rated 'BBB+' by Fitch Ratings and 'A2' by Moody's Investors Service, both with a stable outlook.
firms with at least $500 million in high yield bonds outstanding finds that, during 2006, loans grew at 28% - more than three times (3x) the 9% rate of growth of unsecured bond obligations.
Global Banking News-January 4, 2012--Nordea Bank plans senior unsecured bond issuance(C)2012 ENPublishing - http://www.
However, with a pool of collateral available for covered bond issuance at EUR3bn, and retail bond issues up to EUR700m, the bank could source the funds without resorting to a senior unsecured bond issuance, the bank said.
Approximately 60% of the Recovery Rating changes over the August 2005-September 2006 period occurred among unsecured bond issues where downgrades slightly exceeded upgrades.
announced today receipt of subscriptions for the first tranche, in aggregate principal amount of USD 25 million, of a new senior unsecured bond loan ("the Bond Loan") in a private placement primarily to institutional and professional investors in Norway and other selected countries in Europe ("the Bond Issue").
Svenska Handelsbanken is planning a five-year, dollar-denominated benchmark senior unsecured bond.