What is a Baby Bond?
The baby bond is a bond issue that has a face value that is under the amount of $1,000.00 in United States Dollars (USD). Generally, these types of bonds are designed to appeal to smaller investors who may be willing to invest a smaller sum of money in an issue, with the promise of a more modest return on the investment. Often, companies that do not have ready access to larger investors utilize the baby bond approach. Access may be limited due to the fact that the company operates in a small niche market, or the total amount of funds that the company wishes to raise is not a large enough investment opportunity to generate interest among institutional investors. Smaller towns may also employ the use of a baby bond approach when seeking to raise money for an upcoming project. The baby bond strategy is often ideal when local residents want the opportunity to participate in the bond issue, but may not have a lot of disposable income to invest in the venture. While the baby bond may appear
