Series 66: Secured Bonds

Secured Bonds

Secured bonds are bonds backed by property or some other real asset, such as physical equipment, which serves as collateral for the loan. In the event of default, the property can be foreclosed and sold off to repay the bond. Secured bonds are considered high grade, safe investments, because they are paid off first, ahead of all other bondholders. Because they are a safer investment, they generally pay a lower yield.