Collateral trust bonds

Collateral trust bonds

A bond in which the issuer (often a holding company) grants investors a lien on stocks, notes, bonds, or other financial asset as security. Compare mortgage bond.

Collateral Trust Bond

A bond usually issued by a holding company that is collateralized with securities rather than physical assets. Holding companies are the primary issuers of these bonds because their primary operation is to hold stock in other companies; their main assets are these securities.