Par value bonds Fallen angels Original issue discount bonds Payment-in-kind bonds the time of issue Description Payment-in-kind bonds Type of Bond Bonds that offer a lower coupon rate than the market interest rate for a similar bond at Original issue discount bonds Original issue discount bonds Step-up provision in bonds Bonds that must increase the bond's coupon rate if the company's rating is downgraded Step-up provision in bonds Zero coupon bonds 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 decrease the yield to maturity will increase and the value of its outstanding bonds will decrease decrease increase 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 bondholder to turn in, or put, a bond back to the issuer of the bond at par if a takeover, merger, or a major change in the company's capital structure were to occur. Such a bond is called a make-whole call provision super poison put make-whole call provision