Series 65: 2.9.1 Income Bonds

2.9.1  Income Bonds

Income bonds are a long-term debt security whose principal is usually secured by a mortgage, like a mortgage bond, but whose coupon payments are strictly contingent on a company’s ability to pay, like preferred stock. This means that coupon payments for income bonds are not guaranteed. Income bonds are most often issued by financially strapped companies in an effort to avoid bankruptcy. Typically, a