Akademik

Collateral

Assets than can be repossessed if a borrower defaults. The New York Times Financial Glossary

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collateral col‧lat‧e‧ral [kəˈlætrəl] noun [uncountable]

FINANCE assets promised by a borrower to a lender if the borrower cannot repay a loan; = SECURITY:

• The firm went bankrupt, and because he had used his two homes as collateral when he borrowed money for the company, he lost almost everything he owned.

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Assets used as a form of security for bond issuances. In case of default by the borrowers, the lenders (bondholders) have the legal right to claim those assets and sell them off to repay the loan.

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collateral UK US /kəˈlæt^ər^əl/ noun [U]

► FINANCE property that someone borrowing money will give to the loan company, if he or she cannot pay the debt: use sth as/pledge sth as/put sth up as collateral »Debt counsellors are concerned by the trend towards using houses as collateral against debt.

→ See also MARKETING COLLATERAL(Cf. ↑marketing collateral), SECURITY(Cf. ↑security)

Financial and business terms. 2012.