Face-Amount Certificate Company

Dictionary Says

Definition of 'Face-Amount Certificate Company'


A type of investment firm that issues debt securities to its investors. These securities are called face-amount certificates and are backed by security interest on assets such as real property or other securities. This is similar in nature to mortgage bond debt financing.

Investopedia Says

Investopedia explains 'Face-Amount Certificate Company'


This technique allows a company to obtain financing at relatively low interest rates, since its debt is backed by specific tangible assets under the company's control. Investors who hold face-amount certificates are usually paid a fixed amount of annual interest and are refunded the principal (or face amount) of their securities at a specified termination date.

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