Adjustment Bond

Adjustment Bond Meaning:
A type of bond that is issued to existing bondholders in order to adjust the terms of the original bond, such as the interest rate and time to maturity.

Adjustment Bond Example:
Adjustment bonds are issued when a company is in financial difficulty and may not be able to meet its obligations to existing bondholders. The purpose of issuing an adjustment bond is to increase the likelihood that the company will be able to meet its obligations, albeit changed ones.