A financial instrument (a warrant, specifically a debt warrant) that gives its holder the right, but not the obligation, to buy or sell a specific bond at a specific price either on a particular date or within a specified period of time. It is issued either by the entity issuing the bond or another issuer. A bond warrant is an option that can be exercised into a deal sweetener (kicker), represented by the underlying fixed-income security (the bond). In other words, the holder of a bond warrant, usually the buyer of a bond or note, can exercise the warrant to acquire another fixed-income security with a similar coupon.

In the above sense, a bond warrant is also known as a contingent takedown option.

A specific type of a bond warrant is a harmless warrant which does not become exercisable until the original bond (host bond) becomes callable. Once this condition is met, the additional debt (bond) can be purchased at an identical coupon and maturity as to those of the original bond.

In another context, a bond warrant is a common stock warrant issued by an entity to the initial holders of beneficial interests in a bond issue (as determined in the indenture), allowing the holder to acquire common stock of the entity.