(plural baby bonds)
- (US) any bond, issued with a value less than $1,000, intended for small investors
baby bond - Investment & Finance Definition
A bond with a par value of $1,000 or less. Baby bonds allow small investors to invest in bonds and give smaller corporations a chance to sell bonds. The small issue size means that large institutional investors typically ignore this debt issue. Because baby bonds are sold to a smaller market, they lack the liquidity of large corporate bond issues and thus have higher costs associated with them.