Secured / Unsecured in Bonds1 min read

A secured bond is a bond where the issuer has pledged certain assets if the issuer is unable to replay either the coupon or the face value of the bond. If a secured bond defaults, then the pledged assets get transferred to the investors.

An unsecured bond on the other hand does not have any collateral to backing it if the issuer defaults. Generally unsecured bonds are more risky than secured bonds assuming the issuer for both the bonds is the same.