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Guaranteed bonds
are guaranteed for full debt repayment by a guarantor, which could be the
parent company or one or more financial institutions. The safety of the bond
therefore depends on the financial capability of the issuer and the
guarantor to satisfy the terms of the guarantee.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
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