A Secured Bond is a type of bond backed by an asset from the issuer, which serves as collateral for the bond. Default will cause ownership of the declared asset to switch from the issuer to the bondholder. Generally, secured bonds are less risky then unsecured bonds. However, since issuers of secured bonds typically use the incentive of collateral to reduce interest rates, the rate of return on secured bonds are usually less than unsecured bonds as well.