Consolidated Mortgage Bond

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DEFINITION of 'Consolidated Mortgage Bond'

A bond that consolidates the issues of multiple properties. If the properties covered by the consolidated mortgage bond are already mortgaged, the bond acts as a new mortgage. If the properties do not have outstanding mortgages then the bond is considered the first lien. It can be used as a way to refinance the mortgages on the individual properties. The bond is backed by real estate or physical capital.

INVESTOPEDIA EXPLAINS 'Consolidated Mortgage Bond'

Consolidated mortgage bonds are used by large companies with many properties, such as railroads, looking to refinance them into one bond to market to investors. It allows companies to set a single coupon rate instead of dealing with several, and makes investors happy because they can purchase a singular bond that covers physical assets of a similar type.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Mortgage-Backed Note

    A type of promissory note that is associated with a particular ...
  3. Maintenance Bond

    A type of surety bond purchased by a contractor that protects ...
  4. Refinance

    1. When a business or person revises a payment schedule for repaying ...
  5. Lien

    The legal right of a creditor to sell the collateral property ...
  6. Consolidate

    The combining of assets, liabilities and other financial items ...
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