Face-amount certificate financial definition of face-amount certificate
Also found in: Acronyms
A debt security
with a face value
printed on its certificate
. A face-amount certificate obligates the issuer
to pay the face value to the holder
of the security at its maturity
. Face-amount certificates ordinarily have face values of $1,000, though this may be higher or lower depending upon the issue
Debt issued by a face amount certificate company obligating the issuer to redeem the certificate at face value at maturity. The buyer makes installment payments that earn interest over the life of the certificate.
References in periodicals archive
A face-amount certificate
is an obligation of the issuer to pay a face-, or principal amount, plus specified interest, to the holder of the certificate.
SBM is registered under the Investment Company Act of 1940 as an issuer of face-amount certificates, which guarantee investors a fixed rate of return at a future date.
According to the terms of the Acquisition, SBM assumed the obligations of it's the predecessor SBMs' outstanding face-amount certificates and approximately $28 million in assets.