Secured bond


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Related to Secured bond: unsecured bond

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 ?
Net proceeds from the issuance of the notes will be used to purchase a portfolio of approximately $1,050 million of leveraged loans and senior secured bonds.
Orange Cogen unconditionally guarantees the secured bonds of OC Funding.
CE Gen is a special purpose holding company created solely to issue the secured bonds and hold the equity interests in 13 generating assets with an aggregate net ownership interest of 770 MWs.
RasGas (3) USD750m Series C senior secured bonds due 2016: affirmed at 'A+'; Outlook Stable
have entered into a conditional agreement (the "Conditional Agreement") pursuant to which West Face will launch a tender offer for the shares of InterOil not held by the InterOil Principals and contribute to the repayment of the Senior Secured Bonds (the "Offer").
Fitch has also withdrawn the implied 'AA+' long-term rating on the ECFSA's sales tax & state aid secured bonds.
Payment by OYFCP of principal and interest on the secured bonds has been and remains ultimately dependent on payments by O&Y.
Secured bonds may be issued from time to time in an aggregate principal amount not exceeding the sum of: 65% of the cost or fair value to BGE (whichever is less) of electric distribution property additions: and the aggregate principal amount of retired secured bonds, as defined; and cash deposited with the trustee.
In addition to previously outstanding TFA future tax secured bonds, the payment of building aid is also subject and subordinate to certain other prior statutory and state constitutional claims.
In addition, the senior secured bonds of Sithe Independence Funding Corp, a separately secured project financed entity owned by DNY, have been upgraded to 'BB' from 'BB-'.
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-';