2.8 Types Of Secured Bonds

Question 1

Secured Bonds

Answer 1

Bonds back by property or some other real estate such as physical equipment that serves as collateral for the loan

They are paid off first, ahead of all other bondholders

Question 2

Mortgage Bonds

Answer 2

Secured bonds that offer bondholder is a first lien on corporate property

Question 3

Equipment Trust Certificates (ETCs)

Answer 3

Secured Bonds commonly issued by transportation companies

Question 4

Collateral Trust Bonds

Answer 4

Bonds that are secured by financial assets such as stocks and bonds

Also called a collateral trust certificates (CTCs)