EQUIPMENT TRUST CERTIFICATES
equipment trust certificates: translation
A common type of secured corporate bond. For these bonds, a collateral interest in equipment or machinery provides extra protection for bond holders. In most cases, the equipment that is pledged to secure the bonds is equipment or machinery that is purchased from the proceeds of the bond issue. Typically, a trustee will purchase the equipment, issue the bonds, and lease the equipment to the end user. The end user's lease payments to the trustee are passed to the bond holders in the form of interest and principal. When the bonds are retired, the end user acquires title to the equipment. Airlines, railroads, and shipping companies are the most common issuers. American Banker Glossary
————
certificates issued by a trust that is formed to purchase an asset and lease it to a lessee. When the last of the certificates has been repaid, title and ownership of the asset transfers to the lessee. Bloomberg Financial Dictionary