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Collateral trust bonds |
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Collateral trust bondsA bond in which the issuer (often a holding company) grants investors a lien on stocks, notes, bonds, or other financial asset as security. Compare mortgage bond.Collateral trust bonds Similar MatchesCollateralized mortgage obligation (CMO)Collateralized mortgage obligation (CMO)A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus. Related: mortgage pass-through security. CollateralCollateralThe property or other asset which the lender can sell to repay the loan if the borrower does not keep up the mortgage payments. In most cases, the home is collateral on a mortgage. If the borrower fails to repay the loan, the property will be repossessed. CollateralCollateralAn asset pledged as a guarantee to a lender until a loan is repaid. If the borrower defaults, the lender has a right to sell the collateral asset.An example of a type of financial collateral that can be offered is a life insurance policy which has acquired a cash surrender value equal or greater in value to the loan amount. This could be pledged as security. Collateralized Bond Obligation (CBO)Collateralized Bond Obligation (CBO)Investment-grade bonds backed by a collection of junk bonds with different levels of risk, called tiers, that are determined by the quality of junk bond involved. CBOs backed by highly risky junk bonds receive higher interest rates than other CBOs. Collateral securityCollateral securityAdditional security a borrower supplies to obtain a loan. Further SuggestionsCollateral |
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