What is the difference between NCDs and bonds?

Question

What is the difference between NCDs and bonds?

Accepted Answer · 2022-11-28

Bonds are backed by government guarantee whereas the same is not necessary in case of NCDs. But generally speaking, NCDs are also secured to a larger extent if not 100%. However, bonds carry a lower rate of interest as compared to NCBs.

In case of highly rated company, NCD can be issued by both the Government company or any other public listed company while bonds are backed by the Government's guarantee.
NCDs have comparatively higher rate of interest (return, coupon rate) than Bonds.
NCDs cannot be converted into shares whereas convertible bonds are convertible into shares.

What is the difference between NCDs and bonds?

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