Series 65: Mortgage Bonds

Taken from our Series 65 Online Guide

Mortgage Bonds

Mortgage bonds provide bondholders with a first lien on corporate property. This means that if the corporation defaults on its payments, the trustee can sell property to pay the bondholders. Trustees rarely have to seize property, however, since the company has strong incentives to find other means to pay its bondholders rather than selling off its hard assets. Mortgage bonds pay interest semiannually.

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