Series 82: 3.3.5.1. Income Bonds

3.3.5.1. Income Bonds

Income bonds are a long-term debt security in which the principal is usually secured by a mortgage, like a mortgage bond, but the coupon payments are strictly contingent on a company’s ability to pay, like preferred stock. They are not guaranteed. Income bonds are most often issued by financially strapped companies in an effort to avoid bankruptcy. Generally, companies offer income bonds to existing credito