What is a unsecured bond?

An unsecured bond is a type of bond where the issuer does not pledge any collateral for the repayment of the bond. This means that the bond is not backed by any specific assets or property, and the bondholder's only source of repayment is the issuer's promise to repay the bond.

Unsecured bonds are typically considered riskier than secured bonds, as they offer less protection to the bondholder in case of default. Because of this higher level of risk, unsecured bonds usually offer a higher interest rate than secured bonds.

However, unsecured bonds may also be easier and less expensive for issuers to issue compared to secured bonds, since they do not require the issuer to provide collateral. Unsecured bonds are common among investment grade issuers, and may include various types of bonds such as corporate bonds, municipal bonds, and sovereign bonds.