Accrual Bond: A bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity.

 

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Accrual Bond: A bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity.

Passive Bond: A bond without any interest yield.

Par Bond: A bond trading at its face value.

Payment-In-Kind (PIK) Bond: A bond that gives the issuer an option (during an initial period) either to make coupon payments in cash or in the form of additional bonds.

Performance Bond: A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled.

Perpetual Bond: Nonredeemable bond with no maturity date that pays regular interest rates indefinitely.

PAC Bond: Stands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes.

Peptide Bond: A covalent bond that links two amino acids together to form a polypeptide chain. A covalent bond between the amine end of one amino acid and the acid end of another amino acid.

Obligation Bond: Mortgage bond whose face value exceeds the value of the underlying property, and for which a personal obligation is created to compensate the lender for any costs that may exceed the value o . . . View Full Definition

Municipal Bond Insurance: An insurance policy that guarantees payment on municipal bonds in the event the issuer defaults.