secured lease obligation bond

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Secured Lease Obligation Bond

A debt security that is secured by a lease on an asset. That is, the revenue the issuer obtains from the lease guarantees payment on the bond. It is important to note that only the lease (or a lease coupled with a lien on the asset) secures the bond. This is a common financing tool for electric companies building power stations.

secured lease obligation bond (SLOB)

A debt obligation serviced by lease payments on a single asset. The debt may be secured only by the lease or by a combination of the lease and a lien on the asset being leased. SLOBs are used primarily by electric utilities to finance power stations.
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