QUICK DEFINITION
Collateral is an asset pledged to secure a loan, repo or other financial obligation.
WHY IT MATTERS
Why Collateral matters in bond markets
Collateral quality and availability are central to secured funding, leverage and market liquidity.
MARKET CONTEXT
How to think about it
Bond investors use collateral as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Collateral important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Collateral quality and availability are central to secured funding, leverage and market liquidity.