This document summarizes different types of bonds. It discusses bonds in terms of: 1. Security - whether they are secured (backed by collateral like property) or unsecured (backed only by the issuer's promise to repay). Common types of secured bonds include mortgage-backed securities. 2. Redeemability - whether they can be redeemed or "called" by the issuer before maturity (redeemable) or must be held until maturity (non-redeemable). Redeemable bonds often have call features. 3. Convertibility - whether the bond can be converted to equity/stock (convertible bond) or must be held as a debt instrument (non-convertible

1. Pundra University of Science & Technology
Rangpur Road, Gokul, Bogura, Bangladesh
Sushanta Kumer Mazumder
ID 00917352003
9th
Batch
EMBA

2. TYPES of BOND

3. A bond is written and signed promise to
pay a certain sum of money on a certain
date.
A bond is a debt investment in which an
investor loans money to an entity which
borrows the funds for a defined period
of time at a variable or fixed interest.
Definition of Bond

4. Types of Bond on the Basis of Ensure Security
From the point of view of the security given for payment,
bonds fall into two general classes,
viz., (I) unsecured, and (II) Secured.
(I)Unsecured bonds, sometimes called "plain" bonds,
are credit instruments or unconditional contracts for the
payment of money, to the holders of which no collateral
contract is made, the payment of which is conditioned
on default on the original or credit contract. It is
commonly thought that what in the market is dominated
a bond is secure.
Unsecured. Bond: (a) Government bonds. (b) Corporate
debentures.

5. (II) Secured Bond
Secured bonds are those that are collateralized by an asset –
for instance, property, equipment, or by another income stream.
Mortgage-backed securities (MBS) are an example of a single
bond-type secured by both the physical assets of the borrowers
— the titles to the borrowers' residences— and by the income
stream from the borrowers' mortgage payments.
The secured bonds may again be divided into two general
classes
(a)those having personal security and
(b)those secured by liens on specific property.
These in turn may be sub-divided as follows: (a) Personal
security. I. Endorsed bonds. 2. Guaranteed bonds, and (b) Lien
security. I. By character of property pledged. (a) Real property. I.
Land grant bonds. 2. Real estate bonds. 3. Personal property.

6. On the basis of Redeemable or callable
From the point of view of the redeemablity, bonds fall
into two general classes,
viz., (I) Redeemable, and (II) Non redeemable
(I) Redeemable or Callable: Callable or redeemable
bonds are bonds that can be redeemed or paid off by
the issuer prior to the bonds' maturity date. When an
issuer calls its bonds, it pays investors the call price
(usually the face value of the bonds) together with
accrued interest to date and, at that point, stops making
interest payments. Sometimes a call premium is also
paid. Call provisions are often a feature of corporate
and municipal bonds.

7. There are three primary types of call features, including:
a. Optional Redemption. Allows the issuer, at its option,
to redeem the bonds. Many municipal bonds, for example,
have optional call features that issuers may exercise after a
certain number of years, often 10 years.
b. Sinking Fund Redemption. Requires the issuer to
regularly redeem a fixed portion or all of the bonds in
accordance with a fixed schedule.
c. Extraordinary Redemption. Allows the issuer to call its
bonds before maturity if certain specified events occur,
such as the project for which the bond was issued to
finance has been damaged or destroyed.

8. (II) Non redeemable or Non callable: A non redeemable
security is a financial security that cannot be redeemed
early by the issuer except with the payment of a
penalty. The issuer of a noncallable bond subjects itself
to interest rate risk because, at issuance, it locks in the
interest rate it will pay until the security matures. If
interest rates decline, the issuer must continue paying
the higher rate until the security matures.
Most Treasury securities and municipal bonds are
noncallable.

9. From the point of view of the convertibility, bonds fall into two general
classes,
viz., (I) Convertibles, and (II) Non Convertibles
(I) Convertibles Bonds:
One way of counteracting the risk of inflation is to buy bonds that are
convertible into stocks. These securities typically provide many of the
safeguards inherent in non convertible debt securities yet permit the
holder to exchange his or her bond for a specified number of common
shares. The advantage of this type of bond is that if the stock price
rises, the bond is likely to rise in value also. This kind of upside
potential is part of convertible bonds' appeal. Because of this feature,
however, a premium must be paid for such bonds: They offer a lower
interest rate than regular issues of comparable quality and maturity.
On the basis of Convertibility

10. (II) Non Convertibles : A bond that cannot be
converted to cash according to program
policy. Nonconvertible bonds are exempt
resources.
Nonconvertible bonds have long been
recognized as a stable way to grow savings
without the volatility associated with the stock
market. The biggest drawback to bonds is
their lower interest rate compared to stocks,
as investors are forced to settle for a lower
return in exchange for lower risk.

11. Income Bond
An income bond is a type of debt security in which only the face
value of the bond is promised to be paid to the investor, with
any coupon payments paid only if the issuing company has
enough earnings to pay for the coupon payment.
Zero Coupon Bonds
Zero coupon bonds are bonds that do not pay interest during
the life of the bonds. Instead, investors buy zero coupon bonds
at a deep discount from their face value, which is the amount a
bond will be worth when it "matures" or comes due. The
maturity dates on zero coupon bonds are usually long-term.
These long-term maturity dates allow an investor to plan for a
long-range goal, such as paying for a child’s college education.
With the deep discount, an investor can put up a small amount
of money that can grow over many years.
Some Others Bond

12. THANKS TO ALL