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TeachMeFinance.com - explain Participating bond historic definition... Participating bond -- Comparable to an income bond inasmuch as the return to the holder in interest depends on the extent of the revenues so applicable. The first bonds to bear this name were issued in 1902 and v/ere designated "4 per cent and participating bonds." These bonds were in effect collateral as well as income bonds. The company which issued the bonds owned stock in another company and this stock was deposited and pledged as security for the principal of the bonds. Interest at 4 per cent was guaranteed by the company which issued the bonds and the bonds were also entitled to receive interest in excess of 4 per cent as permitted by the dividends paid on the stock securing the bonds beyond the amount necessary first to provide for the 4 per cent as guaranteed. 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.