Financial Management: Principles and Applications, 13/e

9.4 Types of Bonds

Table 9.7 contains a list of the major types of corporate bonds. In all cases, these are long-term (longer than one year) debt securities that are sold in the public financial market. The differences among the various types of bonds are a function of how each of the following bond attributes is defined:

Secured versus unsecured	Coupon level
Priority of claims	Amortizing or non-amortizing
Initial offering market	Convertibility
Abnormal risk

Let’s take a look at each of these basic bond attributes so that we can better understand the differences in various types of bonds.

Secured Versus Unsecured

A basic distinction between types of bonds is whether or not the bond issue is secured by collateral. A secured bond