Bonds Payable

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A formal unconditional promise , made under seal , to pay a specified sum of money at a determinable future date , and to make periodic interest payment a stated rate until the principal sum is paid

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Bond

Front 2

A contract of debt whereby one party called the issuer borrows funds from another party called the investor

Back 2

Bond

Front 3

A bond is evidence by a certificate and the contractual agreement between the issuer and investor contained in a document known as

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Bond indenture

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Bonds with a single date of maturity

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Term bonds

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Bonds with a series of maturity dates instead of a single one. It allows the issuing entity to retire the bonds by installment

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Serial bond

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This may require the issuing entity to establish a sinking fund to provide adequate money to retire the bond issue at one time

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Term bonds

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Bonds secured by a mortgage on real properties

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Mortgage bonds

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Bond secured by shares end bonds of other corporation

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Collateral trust bonds

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Are unsecured or bonds without collateral security

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Debenture bonds

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Requires registration of the name of the bondholders on the books of the corporation

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Registered bonds

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Are unregistered bonds in the sense that the name of the bond holder is not recorded on the entity books

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Coupon or bearer bonds

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Bond that can be exchange for shares of the issuing entity

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Convertible bonds

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Bonds which may be called in for redemption prior to the maturity date

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Callable bonds

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Bonds issued whereby another party promises to make payment if the borrower fails to do so

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Guaranteed bonds

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High-waist , high-yield bonds issued by entities that are heavily indebited or otherwise in weak financial condition

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Junk bonds

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Bonds that pay no interest but the bonds offer a return in the form of a "deep discounts" or huge discount from the face amount

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Zero-coupun bonds