Series 6: 4.2.8.1. Mortgage Bonds

Taken from our Series 6 Top-off Online Guide

4.2.8.1. Mortgage Bonds

Mortgage bonds offer bondholders a first lien on corporate property. This means that if the corporation defaults on its bond payments, the trustee can sell corporate property to pay the bondholders. Trustees rarely have to seize property, however, since the company has strong incentives to find other means to pay bondholders. Mortgage bonds pay interest semiannually.

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