What is ‘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.
Explaining ‘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.”
Further Reading
- Restoring financial stability in the euro area – papers.ssrn.com [PDF]
- Sovereign bond yield spillovers in the Euro zone during the financial and debt crisis – www.sciencedirect.com [PDF]
- Modeling bond yields in finance and macroeconomics – pubs.aeaweb.org [PDF]
- BRIC and the US financial crisis: An empirical investigation of stock and bond markets – www.sciencedirect.com [PDF]
- Hedging and joint production: Theory and illustrations – www.jstor.org [PDF]
- Modeling the joint dynamics of risk-neutral stock index and bond yield volatilities – www.sciencedirect.com [PDF]
- On the joint pricing of stocks and bonds: Theory and evidence – ideas.repec.org [PDF]
- Validating forecasts of the joint probability density of bond yields: Can affine models beat random walk? – www.sciencedirect.com [PDF]
- Large debt financing: syndicated loans versus corporate bonds – www.tandfonline.com [PDF]
- The European bond markets under EMU – academic.oup.com [PDF]
