Which type of bond is secured by assets and usually has a priority claim on those assets?

A mortgage bond is a type of secured bond that is backed by specific assets, typically real estate or physical properties. This backing provides a level of security for investors, as they have a claim on the underlying assets in the event of default. The priority claim means that if the issuer cannot meet their financial obligations, the bondholders have the right to recover their investments by claiming the specified assets before other creditors or stakeholders.

In contrast, debentures are generally unsecured and rely solely on the creditworthiness of the issuer rather than specific collateral. Collateral Trust bonds, while also secured, are backed by financial assets such as stocks or bonds rather than physical assets. Guaranteed bonds involve a third party backing the bond, but still do not provide the same direct asset backing as a mortgage bond does. Therefore, mortgage bonds are particularly attractive to investors seeking security through priority claims on tangible assets.