Collateral trust bonds

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Definition: Collateral trust bonds

A collateral trust bond is usually issued by a holding company wherein the issuer grants the right to the investor that should he default, the investor shall have the right to the financial asset mentioned in the bond. This financial asset can be stocks, notes or some other type of security.

Thus a collateral trust bond is a form of financial collateral offered by the issuer or the loan taker. It is usually issued by holding companies which deal in securities.

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