such as in buying commercial real estate, will it be able to act as in the passbook loan, as the property itself is pledged and it has a positive cash flow to carry the loan ?
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can i use zero coupon bond as a loan guarantee ?
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One Response to “can i use zero coupon bond as a loan guarantee ?”
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any asset can be used as a loan guarantee. The riskier the asset, the higher the pledge amount required, but yes, any smart lender would take ANY asset as a guarantee. The 0 coup bond may have no income stream, but it is absolutely worth SOMETHING and that gives it the ability to be used as collateral. Just find the right lender.