These arise when a bond is issued with security over certain assets. If the borrower defaults on the bond, the charged assets can be sold and the proceeds used to repay the debt to the lender. A fixed charge is a mortgage over a specific asset, usually land and buildings, and is also known as a mortgage. A floating charge is a charge over a class of assets, such as the stock in trade of the business. Bonds issued with a fixed charge are often known as debenture stock. Dresdner Kleinwort Wasserstein financial glossary
Financial and business terms. 2012.