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26 September, 03:44

Describe the basic features and characteristics of bonds. How can bonds be secured?

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  1. 26 September, 06:22
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    Bonds operate on some basic principles and has three characteristics; Face value, Maturity and Coupon. The bonds are divided into secured and unsecured bonds. Unsecured bonds are the bonds which are not secured/backed by any asset, it is backed by full faith and credit of the issuer.

    While the secured bonds are backed by a form of collateral. They are also secured with revenue stream, the revenue comes form the project for which the bonds were issued. In case of default the issuer transfers the title of the assets to the bondholders.
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