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.


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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