A type of bond for which a firm other than the issuer guarantees its interest and principal payments.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.