[1940] Ch. 17 GUARANTEED SECURITIES (Continued)
1 year ago

Real estate mortgage guarantees come in two types, corporation and independent surety company guarantees. The latter was developed just before the 1929 market collapse. Lease agreements can also guarantee interest on securities. The inclusion of guarantees and rentals in calculating fixed charges is important for analysis. Investors are cautioned against assuming the safety of subsidiary bonds based solely on parent company performance. The article emphasizes the importance of analyzing subsidiary bond issues separately from their parent companies for accurate financial analysis. Examples of successful and unsuccessful subsidiary bonds are provided.