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Poison-Put Bond


A bond whereby an investor can cash in a security prior to its maturity date if the issuer becomes subject to a hostile takeover attempt. This bond has the potential of increasing the cost of a target company because the likely acquirer will need to secure additional cash to pay off bondholders. This means the bond is puttable by the holders who would cash it in should a potential takeover pose a threat of increasing the risk of the target company, say, by taking on more leverage.



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Finance, as a field of knowledge, is substantially wide-ranging and virtually encompasses everything in the realm of corporate finance, financial management, ...
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