A bond that promises to pay interest only when earned by the issuer; failure to pay interest does not result in default.
A long-term debt security in which the issuer is required to pay interest only when interest is earned. This rare security, issued principally as part of a corporate reorganization, offers an investor a relatively weak promise of payment. Some issues require that unpaid interest be accumulated and made up in periods that earnings permit.
A corporate debt issue that pays interest only when, and if, the company has income. Also called an Adjustment Bond.
An unsecured bond that requires interest to be paid only if a specified amount of income is earned.
Generally income bonds promise to repay principal but to pay interest only when earned. In some cases unpaid interest on an income bond may accumulate as a claim against the corporation when the bond becomes due. An income bond may also be issued in lieu of preferred stock.
bond on which the payment of interest is contingent on sufficient earnings. These bonds are commonly used during the reorganization of a failed or failing business.
A bond that only pays interest if the corporation has sufficient earnings. These bonds are usually traded flat (without accrued interest) and are an alternative to bankruptcy. See: Accrued Interest; Adjustment Bond; Flat
Generally, an income bond promises to repay principal but to pay interest only when earned. In some cases, unpaid interest on an income bond may accumulate as a claim against the company when the bond matures.