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Parity Bond

What is '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.

Explaining 'Parity 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.


Further Reading


Foreign-currency bonds: Currency choice and the role of uncovered and covered interest parity
www.tandfonline.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Leverage aversion and risk parityLeverage aversion and risk parity
www.tandfonline.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Risk parity portfolio vs. other asset allocation heuristic portfoliosRisk parity portfolio vs. other asset allocation heuristic portfolios
joi.pm-research.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Monetary policy and long-horizon uncovered interest parityMonetary policy and long-horizon uncovered interest parity
link.springer.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Uncovered interest parity revisitedUncovered interest parity revisited
onlinelibrary.wiley.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Uncovered interest-rate parity over the past two centuriesUncovered interest-rate parity over the past two centuries
www.sciencedirect.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Testing uncovered interest parity at short and long horizons during the post-Bretton Woods eraTesting uncovered interest parity at short and long horizons during the post-Bretton Woods era
www.nber.org [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Credit migration and covered interest rate parityCredit migration and covered interest rate parity
www.sciencedirect.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …

Covered interest rate parity in emerging marketsCovered interest rate parity in emerging markets
www.sciencedirect.com [PDF]
Using count-data techniques, this article studies the determinants of currency choice in the issuance of foreign-currency-denominated bonds. In particular, we investigate whether bond issuers choose their issuance currency in order to exploit the borrowing-cost savings …



Q&A About Parity Bond


What is a parity bond?

A parity bond is a type of security that has equal rights to another already issued security.

How do you pronounce pari passu?

Pari passu is pronounced as pah-ree pah-soo.

What does part passu mean?

Part passu means "equal right".

What does pari passu mean in English?

Pari passu means "equal right" or "on an equal footing".

Are there different types of parity bonds?

Yes, there are different types.