Secured bond


Also found in: Dictionary, Thesaurus, Legal.
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 ?
Fitch has provided a one-notch uplift to the expected GBP240 million secured bond issuance, reflecting its expectation of outstanding recovery for bondholders in the event of insolvency or liquidation.
--GBP240 million senior secured bond assigned 'BB+(EXP)'
Petrochemical tanker Chembulk Tankers said on Thursday that its Chembulk Holding LLC wholly owned subsidiary has priced USD200m in senior secured bonds in a private placement.
Dannemora Mineral AB (STO:DMAB), a mining and exploration company, announced on Wednesday that holders of its 11.75% senior secured bond issue 2011/2016 have at a bondholders meeting on 26 March 2014, granted the company temporary waivers from certain terms in the bond agreement dated 18 March 2011.
4 April 2011 - Oil minnow Norwegian Energy Company ASA (OSL: NOR), or Noreco, said on Friday it had sold a five-year senior secured bond issue of NOK600m.
31 March 2011 - Oil minnow Norwegian Energy Company ASA (OSL: NOR), or Noreco, said Wednesday it will raise between NOK550m and NOK600m in a new senior secured bond maturing in April 2016.
ALXO02 is a senior secured bond issued by Altinex Oil Norway AS totalling NOK300m with maturity on 9 February 2011.
M2 EQUITYBITES-March 27, 2014-Dannemora Mineral obtains waiver from certain terms of senior secured bond
31 March 2011 -- Norwegian investment banks First Securities and Pareto Securities have been appointed joint managers for Norwegian Energy Company ASA's (OSL:NOR) planned placement of a senior secured bond, the oil and gas firm said.
28 June 2010 - Norwegian shipbuilder Bergen Group ASA (OSL: BERGEN) said today that it has completed a NOK330m senior secured bond issue, with expected maturity date on 9 July 2013.
M2 EQUITYBITES-November 14, 2013-ShaMaran Petroleum Corp concludes USD150m senior secured bond issue(C)2013 M2 COMMUNICATIONS http://www.m2.com
The secured bond issue due 2017 will raise funds for the Havila Subsea ship, which is currently under construction at the Havyard Leirvik shipyard.