Chastity Bond
A bond designed to prevent unwanted takeovers by having a maturity that is activated once a takeover is complete. Investopedia Says:
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. Related Terms:
Bond
Hostile Takeover
Macaroni Defense
Poison Pill
Shark Repellant |