3. More on the characteristics of bonds Based on the descriptions given in the following table, identify the type of bond that best matches each description: Type of Bond Description Bonds that offer a lower coupon rate than the market interest rate for a similar bond at the time of Issue. Bonds that pay no coupons but are offered at a substantial discount below their par values to provide capital appreciation for investors Suppose you invested in company A's bonds and the company used a large amount of that debt to acquire another firm. (Such a deal is called a leveraged buyout.) This deal led to significant losses for bondholders and had a negative impact on the firm's credit risk. In such a situation, the company's bond rating is likely to the yield to maturity will and the value of its outstanding bonds will Due to the impact that sudden events could have in the value of bonds, event risk covenants, or provisions, are included in the issuance of some corporate bonds. This covenant allows the issuer to pay off the remaining debt early. The issuer can call its outstanding bonds at a call price equal to the market price of a similar noncallable bond. Such a covenant is called a Grade It Now Save & Continue