Types of Bonds
Collateralised Bonds-Securitisation, Structured Products and Covered Bonds
Commercial Mortgage Backed Securities (CMBS)
Commercial mortgage-backed securities (CMBS) have as underlying collateral loans on hotels, multifamily housing, retail properties, and office or industrial properties. Unlike residential mortgage loans, commercial loans tend to be “locked out” from prepayment for ten years and thus prepayment risk is reduced. However, default risk is greater on commercial loans.