Secured bond

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Secured bond

A bond backed by the pledge of collateral, a mortgage, or other lien, as opposed to an unsecured bond, called a debenture .

Secured Bond

A bond with collateral. That is, the issuer pledges a property or other asset to the bondholders and states that they may take ownership if the issuer defaults. For example, a municipality may secure a bond with future receipts on property taxes. Likewise, a company may secure its bonds with a factory. Secured bonds carry less risk than unsecured bonds and therefore have lower coupon rates, which reduces the issuer's borrowing costs. All secured bonds must be repaid before any unsecured bonds are repaid.

secured bond

A bond that is guaranteed with a pledge of assets. A bond might be secured with real estate.

Secured bond.

The issuer of a bond or other debt security may guarantee, or secure, the bond by pledging, or assigning, collateral to investors. If the issuer defaults, the investors may take possession of the collateral.

A mortgage-backed bond is an example of a secured issue, since the underlying mortgages can be foreclosed and the properties sold to recover some of or all the amount of the bond.

Holders of secured bonds are at the top of the pecking order if an issuer misses an interest payment or defaults on repayment of principal.

References in periodicals archive ?
RasGas (3) USD850m Series B senior secured bonds due 2027: affirmed at 'A+'; Outlook Stable
In addition to the above-mentioned Senior Secured Bonds, the QVT funds are also holders of the unsecured NOK 100 million bond loan (ISIN NO0010362809) and the unsecured USD 20 million bond loan (ISIN NO0010325350) (the "Unsecured Bonds") issued by InterOil.
Fitch considered the potentially lower expected recovery attributes of senior secured bonds compared to senior secured loans in its portfolio credit model (PCM).
Witan's total long-term debt has risen to GBP146 million with the issue of a GBP100 million secured bond in November 2000.
The secured bond indenture requires the existing favorable contract, put in place in 1996, to be replaced at "substantially equivalent terms" five-years prior to its maturity to avoid a cash trap of all excess cash flow up to the amount of then outstanding principal and interest on the secured bonds.
Of concern is the structural subordination of the secured bonds to the debt at the portfolio projects.
O&Y said it is preparing proposals for consideration that it hopes will be satisfactory to the trustee and to the holders of the secured bonds.
1 billion of eligible collateral at book value in the electric distribution category, against which BGE could issue new secured bonds up to about $1.
The issuance of the fiscal 2009 series S-5 bonds does not affect the 'AA+' rating on the future tax secured bonds.
Both the subordinated notes and the 'BBB-' rated $375 million senior secured bonds due 2019 remain on Rating Watch Positive.
750 million senior secured bonds, series 2004A through 2004I (auction rate), due 2024 at 'A-';