Bonds can be secured or unsecured. Secured bonds are backed by an asset clause, which can be in the form of machinery, property, plants, or stock. These bonds imply that if the issuer defaults upon its coupon or principal payment, the bondholders have the option to stake a claim on the assets that are backing the bond. Unsecured bonds are also called debentures; an asset clause does not back them. So, if the issuing company goes bankrupt or defaults on its payments to its shareholders, the interest payment and repayment of the principal amount are not guaranteed to the shareholders.