Which of the following is true about Deferred Serial Bonds?

Deferred serial bonds are characterized by a repayment structure in which the issuer delays the first principal repayment for a specified period, typically longer than one year. This means that while the bond may accrue interest during this initial phase, the bondholders do not receive any principal payments until the deferred period has elapsed.

This structure can be advantageous for issuers as it allows them to manage cash flow more effectively, especially in the early years after issuance, when they might not yet have sufficient revenues to cover debt obligations.

In contrast, options related to immediate repayment or equal installment payments do not accurately represent the nature of deferred serial bonds, as they specifically involve a delay in principal payments, diverging from the traditional serial bond repayment structure that starts repayments sooner. The option regarding the principal amount remaining unchanged does not apply here as principal will eventually be repaid according to the deferred schedule set at the bond's issuance.