- A certificate or evidence of a debt on which the issuing company or governmental body promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. A long-term debt instrument that promises to pay the lender a series of periodic interest payments in addition to returning the principal at maturity. In every case a bond represents debt-its holder is a creditor of the corporation and not a part owner as is the shareholder. Commonly, bonds are secured by a mortgage.The word "bond" is sometimes used more broadly to refer also to unsecured debt instruments, i.e., debentures.@ income bondsIncome bonds are hybrid instruments that take the form of a bond, but the interest obligation is limited or tied to the corporate earnings for the year.@ participating bondsParticipating bonds are another type of hybrid instruments that take the form of a typical debt instrument but the interest obligation is not fixed so that holders are entitled to receive additional amounts from excess earnings or from excess distributions, depending on the terms of the participating bond. A written obligation, made by owner of real property, to repay a loan under specific terms, usually accompanied by a mortgage placed on land as security.See also debenture.@Specific types of bonds as relating to finance, surety, guaranty, appeals, performance, etc. are set forth below:@ adjustment bondBonds issued upon reorganization of corporation.@- annuity bond (See also annuity).@ appeal bondThe court in its discretion may require the appellant to file a bond or provide other security to ensure payment of costs on appeal.See e.g., Fed.R. App.P. 7+ appeal bondBond required to cover costs of appeal in civil cases.See e.g. Fed.R.App.P. 7.@ appearance bondType of bail bond required to insure presence of defendant in criminal case.@ arbitrage bondBond posted to secure performance of arbitrage agreement; a bond which is the subject of arbitrage.See arbitrage.@- attachment bond@ bond and mortgageA species of security, consisting of a bond conditioned for the repayment of a loan of money, and a mortgage of realty to secure the performance of the stipulations of the bond@ bond couponPart of bond which is cut and surrendered for payment of one of successive payments of interest.See coupon bond@ bond creditorA creditor whose debt is secured by a bond@- bond dividend (dividend)@ bond for deedSee bond for title@ bond for titleAn agreement to make title in the future on an executory or incomplete sale. Ingram v. Smith, 62 Ga.App. 335, 7 S.E.2d 922, 926.It is not a conveyance of legal title but only a contract to convey and may ripen into an equitable title upon payment of the consideration@ bond issueThe totality of bonds issued at a given time (for sale to investors). Delivery of instruments as covered by term. Vans Agnew v. Fort Myers Drainage Dist, C.C.A.Fla., 69 F.2d 244, 245@ bond of state or local governmentSee municipal bond@ bond premiumThe difference between the face amount or obligation of the bond and the selling price of such bond if the selling price is greater than the face amount+ bond premiumThe excess of the price of bonds over their face value, and generally reflects the difference between the nominal interest rate borne by such bonds and the actual or effective rate of return determined by the current Grace v. New York State Tax Commission, 37 N.Y.2d 193, 371 N.Y.S.2d 715, 332 N.E.2d 886@ bottomry bondBond secured by mortgage of ships.+ bottomry bondThe instrument embodying the contract or agreement of bottomry. Bond with mortgage of ship as security@@ chattel mortgage bondBonds secured by mortgage on chattels of business.@ closed-end mortgage bondDebt security with provisions which prohibit the firm from issuing additional bonds with the priority of claim against assets.@ collateral trust bondA bond secured by collateral deposited with a trustee. The collateral is often the stocks or bonds of companies controlled by the issuing company but may be other securities. Type of chattel mortgages that are normally secured by common stock and/or bonds issued by subsidiaries of the issuing firm.@ common defeasance bondOne in which the obligor agrees to pay a stipulated amount called a penalty, subject to a condition of defeasance that voids the covenant to pay the specified amount if the condition occurs, and the only covenant or promise to pay by the obligor in such bond is to pay the penalty if the condition is not fulfilled; also known as penalty bond. United Mail Order, Warehouse & Retail Emp. Union, Local 20 v. Montgomery Ward & Co., 9 I11.2d 101, 137 N.E.2d 47, 51.@ common law bondThat which provides coverage in excess of the minimum statutory requirements with respect to a public works project. Florida Keys Community College v. Insurance Co. of North America, Fla.App. 3 Dist., 456 So.2d 1250, 1251.See performance bond.@ completion bondA form of surety or guaranty agreement which contains the promise of a third party, usually a bonding company, to complete or pay for the cost of completion of a construction contract if the construction contractor defaults. Bond given to insure public authority that contract once awarded will be completed as awarded within fixed period of time. Extruded Louver Corp. v. McNulty, 34 Misc.2d 566, 226 N.Y.S.2d 220, 224.See bond- common law bond- contract bond- performance bondSee also Miller Act.@ consolidated bondBond which is sufficiently large in face amount to retire two or more outstanding issues of bonds or securities.@ contract bondA guarantee of the faithful performance of a construction contract and the payment of all material and labor costs incident thereto. A contract bond covering faithful performance is known as a "performance bond," and one covering payment of labor and materials, a "payment bond."See also completion bond- performance bond.@ convertible bondBond that can, at the option of the holder, be converted into (i.e. exchanged for) stock.@ coupon bondBond with interest coupons attached. The coupons are clipped as they come due and are presented by the holder for payment of interest.@ debenture bondBonds secured by general credit of government or corporation rather than by any specific property; i.e. bond which is not secured with collateral.+ debenture bondBonds not secured by any specific property but issued against the general credit of a corporation or government@@ discharging bondSame as a delivery bond except that not only does it permit defendant to regain possession of attached property, it also effects a release of the property from the lien of attachment. Another name for this bond is "dissolution bond."@ discount bondA bond sold for less than face or maturity value. No interest is paid annually, but all interest accrues to the maturity date when it is paidSee also bond discount.@ executor's bondA bond that an executor of an estate must furnish in order to serve as the administrator of an estate.@- fiduciary bond (See also fiduciary).@ first mortgage bondLong-term security that has first claim on specified assets.@ foreign bondAn international bond which is denominated in the currency of the country in which it is issued.@@ general mortgage bondA bond which is secured by a blanket mortgage on the company's property, but which may be subordinate to one or more other mortgages.@ general obligation bondA bond secured by the "full faith and credit" of the issuing government and backed by revenues from its taxing power.@ gold bondFormerly, bond containing a clause which required payment of the bonded indebtedness in gold; such clause has since been prohibited. Norman v. Baltimore & Ohio R. R. Co., 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885.Now bonds are dischargeable by payment in legal tender or money.+ gold bondOne payable in gold coin or its equivalent, which means any money acceptable to United States government in payment of debts due it@ government bondEvidence of indebtedness issued by the government to finance its operations. Such bonds are backed solely by the credit of the government.@ guaranteed bondA bond which has interest or principal, or both, guaranteed by a company other than the issuer.@ guaranty bondType of bond which combines the features of both the fidelity and surety bond and which is given to secure payment and performance.See also bond@ improvement bondType of bonds issued by a city, town or special authority to finance improvements within the district, with payment to be made only from the improvement fund.@ income bondBonds on which interest is payable only when earned and after payment of interest upon prior mortgages. 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.@ indemnity bondAn undertaking given by an obligor to reimburse an obligee for any loss suffered due to the conduct of the obligor or a third person. State Street Bank v. U.S. Fid. & Guar., 181 Ill.App.3d 1081, 132 Ill.Dec. 216, 539 N.E.2d 779, 780@ indeterminate bondCallable bond with no set maturity date.@ industrial development bondsSuch bonds are issued by a municipality as a means of attracting private businesses. The bonds are marketed by the municipality and the proceeds used to build the private business facility. Commonly, the business leases the facility from the municipality for a total rent equal to the amount necessary to pay the interest and amortize the principal on the bonds.@ industrial revenue bondsA specific type of revenue bond whose proceeds are used to finance the purchase or construction of facilities or equipment to be leased to a private corporation. The bonds are backed by the credit of the corporation.@ interest bondBond paid in lieu of interest due on other bonds.@ investment grade bondsAny bond with a rating of BBB or better by the leading bond rating services.@ joint and several bondA bond the principal and interest of which is guaranteed by two or more persons.@ joint bondBond executed by two or more obligors who must be joined in any action on such, as opposed to joint and several bond, on which any or all of obligors may be sued at the option of the obligee.@ junior bondBonds which are subordinate in priority, in principal or interest to another issue.@ junk bondHigh yield, high risk bonds of two types:- those which were investment-grade when originally issued, but which have subsequently been downgraded and- those originally issued as low-grade bonds. The latter group includes bonds issued by low-rated companies to finance operations as well as those issued in connection with corporate takeovers.@ leasehold mortgage bondA bond secured by a building constructed on leased real estate. This bond is subject to the compliance by the lessee (who issues the bond) with the terms of the lease; upon default in the terms of the lease the lessor of the leased real estate has priority over the holders of the leasehold bonds.@- liability bond@ license bondThe term "License Bond" is used interchangeably with "Permit Bond" to describe bonds required by state law, municipal ordinance, or by regulation as a condition precedent to the granting of a license to engage in a specified business or the grant of a permit to exercise a certain privilege. Such bonds provide payment to the obligee for the loss or damage resulting from the operations permitted by law, ordinance or regulation, under which the bond is required and for violations by the licensee of the duties and obligations imposed upon him.@ maintenance bondBond guaranteeing against defects in workmanship or materials for period of time following completion of work contracted for.@ mortgage bondA bond secured by a mortgage on a property. The value of the property may or may not equal the value of the so-called mortgage bonds issued against it.See also leasehold mortgage bond.+ mortgage bondBonds for which real estate or personal property is pledged as security that the bond will be paid as stated in its terms. May be first, second, refunding, and so on@ municipal bondA bond issued by a state or a political subdivision, such as county, city, town or village. The term also designates bonds issued by state agencies and authorities. In general, interest paid on municipal bonds is exempt from federal income taxes and state and local income taxes within the state of issue.See also industrial development bonds- industrial revenue bonds.@ noncallable bond@ non-callable bondBonds which are neither refundable nor redeemable. Lucas v. Florida Power & Light Co., C.A.Fla., 765 F.2d 1039, 1041.Bonds that cannot be redeemed at the option of the issuer.@ obligation bondDevice used by states and municipalities to obtain funds to support projects. City of Spokane v. Taxpayers of City of Spokane et al., Ill Wash.2d 91, 758 P.2d 480, 484.The sale of general obligation bonds is the commitment of the state to a debtor relationship with those who purchase the bonds. Thomas v. Rosen, Alaska, 569 P.2d 793, 796.See general obligation bond.@- official bond@ passive bondBond which bears no interest.@- payment bond (See Miller Act)- performance bond@ permit bondSee license bond@ perpetual bondA bond that has no maturity date.@ personal bondA written document in which the obligor formally recognizes an obligation to pay money or to do a specific act; e.g. surrender a lost bankbook when it is found.@- premium bond@ put bondBond that gives holder right to redeem at specified times before maturity for full face value.+ put bondRight of bondholder to redeem bond before maturity.See also bond@ railroad aid bondsBonds issued by municipal corporations to aid in the construction of railways.@ redelivery bondA statutory bond given by a person in whose possession attached property is found in order to regain possession of the property.+ redelivery bondA bond given to a sheriff or other officer, who has attached or levied on personal property, to obtain the release and repossession of the property, conditioned to redeliver the property to the officer or pay him its value in case the levy or attachment is adjudged good@@ reorganization bondSee adjustment bond.@ revenue bondBonds issued by a public agency, municipal corporation, or state for purpose of raising revenue. Debt securities issued by municipalities in which the payments must be generated by the project supported by the proceeds from the bonds issued, (e.g. earnings of municipal sports complex.)@ school bondsBonds issued by a city, town or school district for purpose of school construction.@ serial bondBond issue consisting of a number of bonds with different maturity dates. Bonds are issued at the same time as distinguished from series bonds which are issued at different times.@ series bondsGroups of bonds normally issued at different times but under same indenture.+ series bondsGroups of bonds (for example, series A, series B) usually issued at different times and with different maturities but under the authority of the same indenture.To be distinguished from serial bonds (q.v.)@ silver bondBonds which require payment in silver; not used in U.S. since payment may be made in legal tender.@ simple bondAt common law, a bond without penalty; a bond for the payment of a definite sum of money to a named obligee on demand or on a day certain.@ single bondA deed whereby the obligor obliges himself, his heirs, executors, and administrators, to pay a certain sum of money to the obligee at a day named, without terms of defeasance.@ special tax or assessment bonds@ special tax bond@ special assessment bondBonds secured by special levies on taxpayers, usually those in the area immediately benefiting from the project or improvement.@ state bondBond issued by state, obligating state to make payment.@ straw bondA bond upon which is used either the names of fictitious persons or those unable to pay the sum guaranteed; generally applied to insufficient bail bonds, improperly taken.@ suretyship bondA contractual arrangement between the surety, the principal and the obligee whereby the surety agrees to protect the obligee if the principal defaults in performing the principal's contractual obligations. The bond is the,instrument which binds the surety.@ tax exempt bondA bond, the receipt of income from which is not taxable, e.g. municipal bond (q.v.).@ treasury bondsBonds reacquired or unsold by corporation.Bonds issued by U.S. Treasury (e.g. U.S. Savings bonds).See also treasury bond@ U.S. savings bondsAn obligation of the United States designed to afford persons the opportunity to create savings by purchasing the bond at a reduced sum and requiring the purchaser to wait a period of time to redeem at face value.@ zero coupon bondTreasury bond that has had the interest coupon clipped by the purchaser of the bond. This purchaser sells the remaining bond at a discount from its face value. The deep discount reflects the many years, usually fifteen to thirty, that remain until the bond may be redeemed at face value. The advantage of these long-term investments is the security afforded by United States Government backing. U.S. v. Parker, C.A.Fla., 839 F.2d 1473, 1475@ penalty bondalso known as common defeasance bond.@ dissolution bondAnother name for this bond is "discharging bond"@
Black's law dictionary. HENRY CAMPBELL BLACK, M. A.. 1990.