conduit bond

Definition

A bond issued by a financial institution but repaid by the entity benefiting from the financing generated by the issuance of the bond. For example, a business might be the borrower using the bonds to raise capital for a real estate development project. The financial institution would simply act as the conduit in the transaction between the company and the bondholders. The institution would handle administrative activities such as revenue distribution and would bear no responsibility for repayment if the borrower defaulted.
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condor conduit borrower