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

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User Necker
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Answer: Collateral bonds

Explanation: In simple words, collateral or secured bonds refers to the the bonds that have are backed by the security of some financial asset such as any stock or some other bonds which are referred to as collateral.

These collateral assets are held and deposited by the trustee at the discretion of the holders. Generally, the interest rate on these bonds is Lower than the interest rates of normal bonds without collateral as they have an additional security.

In case the company fails to pay to the bonds holders they can pressure the company to sell the asset and make payments to the bondholders. These bonds are issued by strong organisations to some specific individuals.

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User Whaledawg
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