Where the court appoints a party or other person to find caution (a sum of money as security), this may be done by depositing cash, or by arranging a bond with an insurance company. It ensures that money is available in the event that the security is required. Note ‘caution’ is pronounced to rhyme with station. See also caution.

A measure of the risk associated with buying a bond produced by a rating agency eg Standard and Poors.

Bond trustees’ discretionary powers and bondholders’ consent This Practice Note explains the discretionary powers of bond trustees, including their ability to modify bond terms and waive breaches without bondholder consent. It also looks at why and how bondholder meetings are convened, the conduct of bondholder meetings and the different types of bondholder resolution. Bond trustees’ discretionary powers Bond trustees are granted various discretionary powers under the terms of the trust deed. These powers include the ability to modify the terms of the bonds without the consent of the bondholders. Such discretion can be exercised where, in the opinion of the bond trustee and subject to certain exceptions, the proposed modifications are: • not 'materially prejudicial to the interests of the bondholders' • to correct a manifest or proven error, or • of a formal, minor or technical nature However, this power is rarely exercised where the proposed amendments are material. For any proposed amendments that are substantive or material, it is likely that the trustee will seek to obtain the consent of the bondholders

On an acquisition finance transaction, the special purpose vehicle established to issue high yield debt

An investor who has bought a bond.

A certificate of debt issued, eg by a government or a company.

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: Stamp duty and SDRT will, in 2027, be replaced with a single, self-assessed tax on transfers of securities, the securities transfer tax (STT) (formerly referred to as the securities transfer charge or STC), that will be paid (and reported) through electronic transfer systems such as CREST or, where appropriate, a new online portal. Draft legislation for the STT was published on 13 July 2026, along with explanatory notes, a policy paper and the outcome of the higher rate 1.5% stamp tax consultation. Subject to exemptions, the STT draft legislation includes a main charge of 0.5% for agreements to transfer chargeable securities to another person for consideration in money or money’s worth and, for transfers to a clearance service (CS) or depositary receipt issuer (DRI), a higher-rate charge of 1.5%. The main charge arises when an agreement is made or, in the case of a conditional agreement, when the conditions are satisfied, although, where the agreement is not electronic, the STT charge arises when the transfer

The terms ‘bonds’ and ‘notes’ are used interchangeably (and there is no legal difference between the terms), though notes tend to be issued either continuously or intermittently with shorter maturities (under three years) and bonds issued in a discrete large offering with a longer maturity. For an introduction to the debt capital markets generally, see Practice Notes: Key features of the debt capital markets and Introductory guide to the debt capital markets. Characteristics and motivation of bondholders Typically bonds will be held by a wide range of investors based in various jurisdictions across the world. Bondholders tend to be institutional or private lenders and may include pension funds, insurance companies, investment funds, governments and large corporate entities. Bonds are freely traded on the open market and this ease and frequency of trading means that it is more difficult to identify and communicate with a diverse and rapidly changing bondholder group during a restructuring than with a bank group. It is often harder to predict how bondholders will react, especially if they are not being guided by a bondholder

Over recent years, there has been an increase in the types of organisations which have sought to enter the capital markets. Capital markets transactions used to be the preserve of banks, financial institutions and commercial companies. However, more recently, other organisations have now entered this space. The growth and diversity of new financial products have shown that collaboration between public, private and voluntary sectors can be achieved through working together on capital market transactions. Social Impact Bonds (SIBs) and Development Impact Bonds (DIBs) Solving deep-rooted social problems has long been a major issue for governments and charities alike. Entrenched social issues (such as children in care, homelessness, access to education, youth employment and long term health issues) can occur where governments are limited in their ability to act or where governments have struggled to address such problems in the past. Traditional models have failed to deliver the results needed to make a significant impact on these issues. SIBs and DIBs attempt to address such issues by bringing together

The former term for a Co-operative Society.

A payment made by the employer to the employee in addition to his basic salary, normally on account of good performance or length of service.

An issue of new shares to members in proportion to their existing holdings (also known as a scrip issue or capitalisation issue), typically carried out to turn accumulated reserves into new shares, which proportionally reduces the value at which each and every share trades.