A joint bond is the bond which is guaranteed by two or more parties. We all know bond is the debt which is taken by company from bond-holder. When company issues the bond, it means, single company has given the guarantee to repay his taken debt. But when other his friend company will also give guarantee to repay the amount of bond, then this bond will become joint bond.
When is the Joint Bond Issued?
When is the Joint Bond Issued?
- Answer is very simple, when the creditor wants more security of his debt. At that time, other party than issuer will give his own guarantee for repayment of debt which is written in the bond plus interest.
- When parent company gives the guarantee jointly with its subsidiary company for repayment of debt.
- Sometime bank needs joint guarantors when it provides home loan. At that time, two or more parties will sign the join bond agreement. They have to repay the monthly installment. Any one or all together can repay this monthly installment of bank's home loan.
What is the Joint Bond Agreement?
As per this agreement, all the parties who give guarantee will be liable to repay the debt jointly and severally.
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