A bond secured by a Mortgage on a Property. Mortgage bonds are backed by Real estate or physical equipment that can be liquidated. These are usually considered high-grade, safe investments. If an Issuer in Default has both secured and Unsecured bonds Outstanding, secured bondholders are Paid off first, then unsecured Bondholder. Naturally, because Unsecured bonds carry greater Risk than Secured bond, they usually pay higher Yield.
