Definition: Structured bond

Category: External debt - IMF

Structured bonds have characteristics that are designed to attract a certain type of investor and/or take advantage of particular market circumstances. 

However, structuring securities to appeal to a particular type of investor risks the possibility of a loss of liquidity if the market moves in such a way as to make the structured features of the issue no longer attractive. 

Typically the structured features are achieved through the use of derivatives—for instance, a credit-linked note is a bond with an embedded credit derivative. http://ec.europa.eu/eurostat/ramon/statmanuals/files/external_debt_guide_2003_EN.pdf#page=227