Series 65: 2.7.1 Mortgage Bonds

Taken from our Series 65 Online Guide

2.7.1  Mortgage Bonds

Mortgage bonds are secured bonds that offer bondholders 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 companies have strong incentives to find other means to pay bondholders. Mortgage bonds pay interest semiannually.

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