Busted Bond

Bonds issued by an issuer who failed to pay the required interest payments or principal amount to the debt holder (or both). The issuer of a busted bond would be considered bankrupt and would have to liquidate his or her assets to repay the bond holders.

The terms “busted bond” can also refer to convertible debt securities that have an insignificant conversion value because conversion price is much higher than the market value of the underlying securities.

In the event that a bond becomes busted, the issuing firm would be forced to file for bankruptcy, as the terms of their debt had been violated. Busted bonds in default are worth much less than the discounted value of their cash flows.

Busted bonds that arise from a decline in the price of the underlying asset, such as convertible bonds, are not in violation of their covenants - they are simply worth less than equivalent securities with embedded options and are closer to being in the money.


Investment dictionary. . 2012.

Look at other dictionaries:

  • busted bond — old bond A bond issued by a government or corporation that has already defaulted on the loan on which the bonds are based. Busted bonds are now collectors items, especially those from prerevolutionary Russia and those issued by US railroad… …   Big dictionary of business and management

  • Busted Convertible Security — A convertible security that is trading well below its conversion value. The result is that the security is valued as regular debt because there is very little chance that it will ever reach the convertible price before maturity. This is a… …   Investment dictionary

  • busted convertible — A convertible bond trading so far below its conversion value that it trades on investment value alone, meaning it has value only as a bond. It has essentially no equity value. American Banker Glossary Related: fixed income equivalent. Mainly… …   Financial and business terms

  • Busted convertible — Related: Fixed income equivalent. The New York Times Financial Glossary * * *    A convertible issue of little value because the underlying stock has fallen below the conversion price.    ► See Convertible Bond, Convertible Preference Share …   Financial and business terms

  • List of James Bond henchmen in Goldfinger — A list of henchmen from the James Bond film and novel Goldfinger from the List of James Bond henchmen. Contents 1 Oddjob 1.1 Novel 1.2 Film 1.3 Other appear …   Wikipedia

  • ОБАНКРОТИВШАЯСЯ ОБЛИГАЦИЯ — (busted bond, old bond) Облигация, выпущенная правительством или корпорацией, которые уже не выполнили своих обязательств по займу, представленному данными облигациями. Обанкротившиеся облигации в настоящее время являются объектами интереса… …   Финансовый словарь

  • СТАРАЯ ОБЛИГАЦИЯ — (busted bond, old bond) Облигация, выпущенная правительством или корпорацией, которые уже не выполнили своих обязательств по займу, представленному данными облигациями. Обанкротившиеся облигации в настоящее время являются объектами интереса… …   Финансовый словарь

  • обанкротившаяся облигация — старая облигация Облигация, выпущенная правительством или корпорацией, которые уже не выполнили своих обязательств по займу, представленному данными облигациями. Обанкротившиеся облигации в настоящее время являются объектами интереса… …   Справочник технического переводчика

  • MythBusters (2008 season) — Country of origin Australia United States No. of episodes 20 (includes 8 specials) Broadcast Original channel Discovery Channel …   Wikipedia

  • MythBusters (2004 season) — Country of origin Australia United States No. of episodes 20 (includes 4 specials) Broadcast Original channel Discovery Channel …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.