Bonds are typically viewed as very conservative investments with relatively simple terms. However, the industry is quite complicated and offers some higher risk securities. For example, catastrophe bonds (or "cat-bonds") have normal cash repayments to lenders, except if a pre-defined catastrophe (hurricane, wildfire, earthquake, etc.) occurs. In this event, all bond cash flows cease. For obvious reasons, these are popular among issuers in the insurance industry, and the primary buyers are hedge funds (primarily due to the higher risk/return profile such bonds offer). See a related article here, Bloomberg.
Dolvin, Steven D., "Catastrophe Bonds" (2014). All Chapters. 104.