Which of the following type of debt obligation most likely protects bondholders when the assets serving as collateral are non-performing?
A) Covered bonds
B) Collateral trust bonds
C) Mortgage-backed securities

Question

Quizplus · Accepted Answer

Covered bonds are debt obligations backed by a dual recourse structure, which means that if the assets serving as collateral for the bonds are non-performing, investors still have a claim against the issuing banks. This dual recourse structure helps protect bondholders from losses in case of default.

Which of the Following Type of Debt Obligation Most Likely