Unsecured bond

An **Unsecured bond** is a type of bond that is not backed by any specific collateral or physical assets. Instead, it relies solely on the issuer’s creditworthiness and promise to repay the principal and interest. Because there is no collateral guaranteeing repayment, unsecured bonds typically carry higher risk compared to secured bonds, and may offer higher yields to compensate investors. These bonds are commonly issued by corporations or governments with strong credit ratings.