Joint Bond

DEFINITION of 'Joint Bond'

A bond that is guaranteed by a party other than the issuer. A joint bond is an issue which is essentially a liability to multiple parties. These parties may be both corporate entities or government agencies.

BREAKING DOWN 'Joint Bond'

While joint bonds can include any combination of parties, they are commonly used when a parent company is required to guarantee the bonds of a subsidiary. In such an instance, debt holders may not be interested in taking a debt investment in a subsidiary that may not share a credit rating quite as high as its parent, thus the parent company will act as an additional guarantor on the debt.


Also know as "joint and several bond."

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