A bond similar to
a DIVISIONAL BOND, but the underlying mortgage of which does not necessarily
coincide with the divisions of the issuing organization.
Extension bonds usually are covered by railroad property which
is a continuation or extension of the existing system.
They are frequently secured not only by the extension property,
but also by a junior lien upon other portions of the property.
The strength of
extension bonds as an investment depends on whether the extended property
is a main line and essential to the handling of through traffic.