Wedding Warrant

Posted in Finance, Accounting and Economics Terms, Total Reads: 474
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Definition: Wedding Warrant

Wedding Warrant is a warrant that confirms that a new debt instrument (e.g. a Bond) cannot be bought from the same company until and unless the previous bond held by the debtor is not surrendered.

Example:

John and John Company offers its employee a security worth 5000$ at 10% rate with a specific maturity date. Under Wedding Warrant now the employee cant buy same or other instrument until he surrenders the existing one. Once he gives up the existing one he can buy a new one.

This wedding warrant helps companies to monitor and control the debt level as to give a new debt instrument they can get previous one back hence reducing the risk.

Advantage:

Helpful for investors as it is a different structured way of buying a security


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