If bonds are sold at a discount, the effective interest rate paid is more than the nominal rate since the issuer received less than the face amount of the bonds but are required to pay interest on the face amount. Callable bonds are bonds that can be redeemed by the issuer at specific prices, usually at a premium, prior to their maturity. Convertible bonds are bonds that at the option of the bondholder can be exchanged for other securities, usually equity securities of the corporation issuing the bonds during a specific time at a determined or determinable conversion rate. The conversion price is the price at which convertible securities can be converted into common stock. The conversion ratio is the number of shares of common stock or other securities that may be obtained by converting one convertible bond.
Secured bonds are bonds that have a specific claim against assets of the issuing corporation.
Real estate mortgage bonds have a specific claim against certain real property of the issuer, such as land and building. A chattel mortgage bond has a claim against personal property, such as the securities owned by the bond issuer, such as stocks or bonds. Income bonds are bonds on which interest payments are made only from operating income of the issuing entity. Senior securities are securities that have claims that must be satisfied before payments can be made against junior securities. Registered bonds are issued in the name of the owner and are recorded in the owner's name on the records of the issuer.