Chastity Bond
2020-08-10 16:56
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A bond designed to prevent unwanted takeovers by having a maturity that is activated once a takeover is complete.
|||The idea behind the chastity bond is that companies will be less inclined to take over a company if they know that afterward they will immediately be forced to pay bondholders.
This is similar in nature to a macaroni strategy except that the redemption prices of the bonds are not inflated - the chastity bond matures at par.
