Dictionary of Banking Terms: collateral trust note
collateral trust note
- short-term commercial paper issued by a mortgage banker to finance its inventory of loans. These notes are issued under a trust indenture, and are collateralized by a pool of mortgages. Holders of the notes have equal claim with lenders originating the mortgages.
- short-term notes secured by pledged bonds or other securities, most often issued by railroads, holding companies, and investment trusts.
