Series 6 - Investment Company And Variable Contracts Products Representative Exam
Preview Mode
A company with poor credit that wants to raise capital via a bond issuance will most likely use which of the following instruments?
Guaranteed bonds
A
Debentures
B
Short term bonds
C
Collateral trust certificate
D
Explanations
Collateral trust certificates are backed by securities that the issuer owns. A Trustee holds the securities, and in the event of a default, uses them to pay off the bonds.