Frequently Asked Questions

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Bond Terminologies

Explain differences between Secured Bonds and Unsecured Bonds.


Secured Bonds are bonds that are collateralized by an issuer's asset or future cash flows. If the issuer defaults, then bondholders can claim the asset or the cash flow generating source.

Unsecured Bonds don’t come with any collateral. If the issuer defaults, unsecured bondholders can't claim any of the issuers' assets. Here investment decision is taken purely on trust on the issuer and credit history of the issuer. During bankruptcy, secured bonds are paid before unsecured bonds.