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What happens if a borrower defaults?
What happens if a borrower defaults?
Rezaah Ahmad avatar
Written by Rezaah Ahmad
Updated over a week ago

A default is when a bond issuer has not met one or more covenants or scheduled payments under its bond agreement. Usually a bond issuer will inform its investors prior to when a default happens that this may occur. In this instance the bond agreement is usually amended by consent of the required number of investors but in the event this does not happen and an issuer breaches a covenant or payment it will be in default and investors can enforce their security over the assets of the company.

WiseAlpha, as holder of the underlying bond, will vote on any amendments to the bond agreement and update our Fractional Bond holders with any changes to the economic terms of their Fractional Bonds as a result.

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