What term is used for bonds that have specific assets pledged as collateral?

Business · High School · Wed Jan 13 2021

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 The term used for bonds that have specific assets pledged as collateral is "secured bonds." Secured bonds are backed by particular assets of the issuer, such as real estate, equipment, or other types of property. If the issuing entity were to default on the bond, the bondholders have a claim to the collateral pledged. This type of asset backing reduces the risk for bondholders, often resulting in a lower yield than unsecured bonds, which are not backed by any specific assets. One common type of secured bond is a mortgage bond, which is backed by real estate assets.

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