Term:
Income bond; participating bond
Definition:
In the U.S., bonds which are guaranteed as to principal but which have interest payments as a contingent obligation, that are required only if earned and then assented to by the board of directors. Failure to pay interest does not constitute default. (Note that in the U.K., income bond refers to a type of fixed-interest investment offered by life insurance companies, consisting of an immediate annuity plus a deferred annuity.)
Domain:
Finance
Source:
World Bank: Glossary of Finance and Debt