Face-Amount Certificate Company
A type of investment firm that issues debt securities to its investors. These securities are called face-amount certificates and are backed by security interest on assets such as real property or other securities. This is similar in nature to mortgage bond debt financing. Investopedia Says:
This technique allows a company to obtain financing at relatively low interest rates, since its debt is backed by specific tangible assets under the company's control. Investors who hold face-amount certificates are usually paid a fixed amount of annual interest and are refunded the principal (or face amount) of their securities at a specified termination date. Related Terms:
Debt Financing
Face Value
Financing
Interest Rate
Principal
Secured Bond
Secured Debt
Tangible Asset |