Plain vanilla bonds are simple bonds, no caveats, just simple Vanilla, a standard structure. They may leave an investor under al safety illusion of completely backed and in case if insolvency, possibility of liquidation. However as we have seen in the cases if ILFS and DHFL and many more, liquidation is a painstakingly long process with huge haircuts on collateral upon liquidation. So beware of this risk!Textually, sounds awesome, but practically, it could kill the investors!
Why it is pool of Loan asset and not only asset?
What are covered bonds and market linked debentures and how do they work?
Are covered bond fully secured(0% risk of default) as it is backed by a pool of assets? And what is plain vanilla bonds?