Original issue discount bonds Bonds that are offered at a discounted price at the time of issue Bonds that must increase the bond's coupon rate if the company's rating is downgraded 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. the yield to maturity will , and the value of its outstanding In such a situation, the company's bond rating is likely to 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