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In the context of project financing, additional security pledged to support the project financing.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


Assets pledged as security for a loan. In the event that a borrower defaults on the terms of a loan, the collateral may be sold, with the proceeds used to satisfy any remaining obligations. High-quality collateral reduces risk to the lender and results in a lower rate of interest on the loan.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


Assets with monetary value, such as stock, bonds, or real estate, which are used to guarantee a loan, are considered collateral.

If the borrower defaults and fails to fulfill the terms of the loan agreement, the collateral, or some portion of it, may become the property of the lender.

For example, if you borrow money to buy a car, the car is the collateral. If you default, the lender can repossess the car and sell it to recover the amount you borrowed.

Loans guaranteed by collateral are also known as secured loans.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


Security for a debt.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Besides, with increasing the calculated chip slenderness ratio, the surface roughness increased collaterally. However, the chip slenderness ratio did not have any important effect to be taken into consideration on the hole delamination.
(19) For that reason, many states have laws barring their courts from collaterally entertaining claims that were or could have been resolved at some prior phase of the criminal process.
(52) Due process rights to adequate representation and adequate notice are protected initially by the certifying court, not by "collateral second-guessing of those determinations." (53) In this view, class action judgments carry final preclusive effect, and class members are precluded from collaterally attacking a judgment in the absence of some demonstrated procedural defect.
* Policy owners have the contractual right to assign the ownership of the policy to a new owner; the right to change the beneficiary of the policy to a new beneficiary; the right to collaterally assign the policy to offset a debt obligation to a financial institution or other legal person; the right to take a reduced paid-up policy where no more future premiums are due.
Either one could have gone off in Aberdeen's face, causing damage not just to the player involved but also, collaterally, to the team and its ambitions.
AMCs' required, comprehensive QC process--which helps prevent attempts to mislead and ensures appraisals delivered to their clients are collaterally sound--can be of great benefit to appraisers.
The irony is that Jews are collaterally affected by bans on ritual slaughter and circumcision so they are opposed to such measures.
If you bomb, drone, invade, desecrate and slaughter - collaterally or otherwise - a people and their lands, they might find ways to return the favour.
The political/policy wrangling between the federal and provincial governments produced a large population of collaterally damaged Metis.
Despite mounting public pressure, states continue to refuse to provide factual information about who has been targeted, under which policies, and with what out-come--including whether innocent civilians have been "collaterally" killed or injured.