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Mortgage bonds
require the issuer to pledge certain real assets as security for the bond.
In the event of a default, the bondholders can foreclose on the pledged
assets to satisfy their claims, although in practice such foreclosures are
unusual.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
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