Series 7: 2.10.1. Income Bonds

2.10.1. Income Bonds

Income bonds are a long-term debt security in which the principal is usually secured by a mortgage. The coupon payments, unlike those of a mortgage bond, are not guaranteed, but are contingent on a company’s ability to pay, like preferred stock dividends. Income bonds are generally issued by financially strapped companies, often in an effort to avoid bankruptcy. Typically, companies offer