2.8.1. Mortgage Bonds Flashcards
1
Q
What are mortgage bonds?
A
Secured bonds that offer investors a first lien on corporate property
2
Q
What does “having a lien” mean?
A
If a corporation default on bond payments, the trustee can sell the property to pay the bond holders.
3
Q
Is it common for trustees to seize the property in the event of bond payments default?
A
It is rare for the trustee to seize the property as companies are often able to find other means to pay the bondholders
4
Q
Mortgage bonds pay interest ________?
A
Semiannually
