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TeachMeFinance.com Adjustment Bond -- Bond issued at the time of recapitalization of an entity facing insolvency and exchanged for still owing bonds whose owners themselves sanction the transaction as they see greater benefits in adjustment bonds. The interest on these bonds is limited by the earnings of the entity. In this respect, they are similar to interest bonds, which are said to trade flat or without accumulated interest. historic definition... Adjustment bond -- A special and little used name for a. bond issued for the adjustment of the finances of a company to its increased need for funds (money). For example, a railroad desires additional funds for improvements or extensions. It issues adjustment bonds for the purpose and these are an original or first lien on new property or are a lien after existing liens on property that is improved by expenditures on it from the proceeds of the adjustment bonds. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2007 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.