Joint Bond

AAA

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.

INVESTOPEDIA EXPLAINS '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."

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Joint

    A legal term describing a transaction or agreement where two ...
  3. Joint Venture - JV

    A business arrangement in which two or more parties agree to ...
  4. Joint Owned Property

    Any property held in the name of two or more parties. The two ...
  5. Joint Stock Company

    An organization that falls between the definitions of a partnership ...
  6. Jointly and Severally

    1. A legal term describing a partnership in which individual ...
Related Articles
  1. Bonds & Fixed Income

    Six Biggest Bond Risks

    Don't assume that you can't lose money in this market - you can. Find out how.
  2. Investing

    The Advantages Of Bonds

    Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment.
  3. Options & Futures

    Options On Futures: A World Of Potential Profit

    There's one simple hurdle in the transition from stock to futures options: learning about product specifications.
  4. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  5. Bonds & Fixed Income

    Advanced Bond Concepts

    Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
  6. Investing

    What’s The Essence Of Smart Beta In Fixed Income?

    In essence, smart beta strategies seek to re-write index rules to capture factors, such as value, quality, or low volatility, in their stock portfolios.
  7. Bonds & Fixed Income

    Should Junk Bond ETFs Be a Part of Your Portfolio?

    Should junk bonds be a part of your portfolio? Here's what you need to know.
  8. Professionals

    Vanguard Readies Muni Bond ETF

    Vanguard is set to roll out a muni bond ETF, the firm's first.
  9. Mutual Funds & ETFs

    Is the TLT ETF a Good Bet for the Long Run?

    Is the iShares 20+ Year Treasury Bond ETF (TLT) a good bet for the long run?
  10. Bonds & Fixed Income

    African Equities vs. Bonds: Risks and Rewards

    A look at the risks and rewards of exposure to African equities vs. bonds.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center