A security that has a lower priority claim on assets and income than a senior security.
In the United States, a mortgage bond is a type of bond secured by a real asset, such as land or property. These bonds often include provisions defining the prioritization of claims in case of default.
An obligation bond is a type of mortgage bond in which the face value is greater than the value of the underlying property. The difference compensates the lender for costs exceeding the mortgage value.
