covered bond

Definition

A bond or note that is backed by mortgages or cash flows from other debt. If the bond issuer goes into bankruptcy, investors who purchased the bonds can lay claim to the underlying assets.

Use covered bond in a sentence

It was a covered bond and I was glad to know that because that meant it was backed by mortgages.

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You should try to invest in a covered bond if you want to get a nice low risk investment in your portfolio.

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The government was struggling with a huge deficit and record unemployment rates which forced them to issue a covered bond backed by money they had lent to assist a foreign nation that was still in repayment.

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European Covered Bond Council (ECBC) asset-backed security