Parity Bond


DEFINITION of 'Parity Bond'

Two or more bond issues with equal rights to one another. In other words, a parity bond is an issued bond with equal rights to a claim as other bonds already issued. For example, unsecured bonds have equal rights in that coupons can be claimed without any one bond having priority over another. Therefore, unsecured bonds would be referred to as parity bonds.

A parity bond is also referred to as part passu bond.


These types of fixed-income securities are commonly issued by municipalities as a way to gather finance capital. Parity bonds are similar to pari passu securities, which are securities or debts that have equal claims on a right. For example, common shares all have equal rights to claim a dividend without one share having priority over another.

  1. Bond

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

    A loan or security that ranks above other loans or securities ...
  3. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic ...
  4. Pari-passu

    A Latin phrase meaning "equal footing" that describes situations ...
  5. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  6. Rights

    A security giving stockholders entitlement to purchase new shares ...
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