Face-Amount Certificate Company


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.

BREAKING DOWN '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.

  1. SEC Form N-8A

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  2. Management Investment Company

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  3. Debt Financing

    When a firm raises money for working capital or capital expenditures ...
  4. Face Value

    The nominal value or dollar value of a security stated by the ...
  5. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  6. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
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