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Corporate bond. A bond issued by a
corporation and backed by the company's credit and/or its assets.
Industrial bond. A bond issued to finance
construction for manufacturing or commercial activity.
Collateral trust bond. A corporate bond backed by
financial assets (such as a securities portfolio) of a corporation. These assets
are held by a third-party trustee.
Equipment trust certificate. A corporate bond
secured by company equipment. Among the most common issuers are airlines and
railroads that need to finance new purchases of equipment. The equipment bought
may be used as collateral.
Mortgage bond. A secured corporate bond that is
backed by real estate. Because mortgage bond collateral provides a clear claim
on a company's assets, these bonds are considered secure and high-grade.
Junk bond. A bond that is speculative,
high-yielding, and issued by a company that typically finances its growth and
operations with debt. Ratings companies usually assign low grades to these
bonds. |
