Series 79: Guaranteed Bonds

Taken from our Series 79 Top-off Online Guide

Guaranteed Bonds

A guaranteed bond is a bond issued by one corporation, but with payment of interest and principal guaranteed by another corporation, such as a parent company, if the issuer defaults. While such bonds are safer than comparable bonds without a guarantee, they are not secured. Instead, they become debentures of the guarantor. Guaranteed bonds are widely used in railroad finance.

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