Bond—a writtenacknowledgement of a debt, usually given under the company's seal, containing provisions for payment of interest and repayment of principal. The debt may be secured on some or all of the company's assets.
TypeSecured BondsUnsecured Bonds
Securityand votingrights● Can be secured by one or more specific asset （e.g. over property）, this is known as a fixed charge.
● Secured by a class of assets （e.g. net current assets or working capital）, this is known as a floating charge.
● On default, the assets used as security are sold and the proceeds applied towards repaying the debt.
● No voting rights.		● No security.
● Holders have the same rights as ordinary creditors.
● No voting rights.
Income● A fixed annual amount （interest）, usually expressed as a percentage of nominal value.● A fixed annual amount （interest）, usually expressed as a percentage of nominal value.
　　In the UK, bonds are
　　usually issued with a face value of £100.
　　They can be traded on
　　the bond market and reach a market price.
　　Hence, if a bond is
　　"selling at a premium of 15%", this means that a bond with a face value of ?100
　　is currently selling for £115.
　　This indicates that the
　　rate of interest on this bond is attractive when compared with current market
　　rates, creating demand for the bond and a rise in price.*
　　In the US the face
　　value of a bond is usually $1,000.
　　2. Deep Discount Bonds
　　Deep discount
　　bonds—bonds issued at a large discount to nominal value (i.e. issued well below
　　face value) and redeemable at par on maturity.*
　　With deep discount
　　bonds, investors receive a large capital gain on redemption, but are paid a low
　　rate of interest, if any, during the term of the loan.
　　These bonds offer a
　　cash flow advantage to the borrower. This is especially
　　useful for financing projects which produce weak cash flows in early years.
　　3.Zero-Coupon Bonds
　　Zero-coupon bonds—bonds
　　issued at a discount to face value and which pay zero annual interest.
　　Zero-coupon bonds have
　　the following advantages:
　　The issuing company
　　pays no interest and the only cash payout is at the bonds' maturity.
　　Investors gain from the
　　difference between issue and redemption price.