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Secured Bond

Secured Bond Definition

A type of bond that is secured by a collateral, the issuer's pledge of an asset such as a mortgage or lien, which can be transferred to the bondholder in case of default. Because of the pledge of an asset, secured bonds are less risky than unsecured bonds, therefore they ensure lower returns. That is why securing a bond is a way for the issuer to decrease its interest payments.


Additional meaning of Secured Bond:

The most common type of secured bonds are mortgage bonds.


RELATED TERMS
Redeemable Bond
Sinkable Bond
RELATED CATEGORIES
Bonds







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