1)  Arise from contract known as bond indenture.

2)  A promise to pay a sum of money plus periodic interest. 

3)  Typically have a $1,000 face value.

4)  Underwriter usually guarantees company a specific price for the bond issue, then sell to investing public at a higher price to make a profit. 

Backed by a pledge of some sort of collateral.

Example-mortgage bond, collateral trust bonds. 

Not back by collateral.

Example-debenture bond and junk bond (very risky and pays a high interest rate)