1. Classes of Bonds
(As to Type of Security)
Mary Justine A. Basco
HRDM 3-N

2. Classification of Bonds as to type of
Security
1. Earnings and General unpledged assets of
issuing company. (Debentures- is a general
credit bonds not secured by specific property.)
2. Earnings of issuing company plus pledge of
specific property (mortgage bonds- are those
which are secured by a lien on specifically
named property such as land, buildings,
equipment and other fixed assets.)

3. a.) Real Estate Mortgages
 Real estate mortgages according to priority of claims:
 Senior Liens. They are those having prior claim
to fixed assets pledged as security.
 Junior Liens. Bonds having subsequent liens to
fixed assets pledged as security.
 Real estate mortgages according to types of issue:
 Close-end Issues. refers to those wherein
subsequent issues on the specific property pledged as
collateral are not allowed.

4.  Open-end Issues. Types of bond issue that permits
the issuance of additional bond issues or series to be
made under the original mortgage secured by a
single lien.
 Limited open-end issue. Is an improvement of the
open and closed issues allowing additional bonds to
be sold after a maximum amount.
b.) Chattel Mortgages

5. 3. All or some of original security plus general
credit of another company which may be:
 Assumed Bonds. The bonds previously issued
by the deceased corporation may also assumed by the
surviving corporation.
 Guaranteed Bonds. Is a type of bond in which
the payment of interest, or principal or both, is guaranteed
by one or more individuals or corporations.

6. 4. Combined earnings of allied companies plus
collateral protection in some cases (joint bonds).
 Joint Bonds. There are times when a property
is owned jointly by several companies. The same
property may be used as security for a bond issue.

7. Classes of Bonds by Type of
Security

8. ~ Thank you ~
Mjhy   