COMMODITY BONDS :

Commodity bonds are bonds issued to share the risk and profitability of future commodity prices with the investor.

For example, petro bonds, silver bonds, gold bonds and coal bonds. A petro bond may carry a fixed rate of interest with part of the face value of the bonds denominated in barrels of oil. There would be a floor in the face value of the bond. In view of the upside profit potential in oil prices, the interest rate could be lower than the market rate of interest. These bonds may be issued for decontrolled items.