Bonds which are backed only by the good faith of the borrower are referred to as?

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2026-04-17 14:31

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Bonds that are backed only by the good faith of the borrower are referred to as "unsecured bonds" or "debenture bonds." Unlike secured bonds, which are backed by specific assets, unsecured bonds rely on the issuer's creditworthiness and financial stability. This makes them riskier for investors, as there is no collateral to claim in the event of default.

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