Perpetual bonds are considered to be a hybrid security, meaning they are not entirely debt or equity. Because they do not have a maturity date, they are more akin to equity as they do not have a specified repayment date. Whereas regular bonds have a predefined maturity date, where the debt will eventually be paid in full, a perpetual bond does not have such an obligation.

The structure of perpetual bonds is unique as these bonds have characteristics of both debt and equity. They offer their investors a steady stream of income from coupon payments, similar to a regular bond, but without the risk of default. While the issuer does not have to worry about making the principal payment associated with regular bonds, the perpetual bonds can have the potential for higher returns.

At the same time, perpetual bonds require the issuer to continue to pay interest indefinitely, which may result in price and yield volatility. This means perpetual bond prices can fluctuate with the changing interest rates and can be difficult to assess. Moreover, since these bonds are unsecured, they pose a greater risk to creditors in the event of default.

Perpetual bonds, while offering an attractive steady stream of income, are not often used since they require a larger commitment from the issuer and more risk than conventional bonds. While perpetual bonds may be suitable for larger, more experienced investors and companies who are looking for a steady source of income, they are generally not recommended for investors who are new to the market or not willing to take on a higher level of risk.