English Lexicon

Collateralize

/kəˈlæt.ər.ə.laɪz/
verbCEFR C1 (Advanced)Top #8500 frequency
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Comprehensive Definitions & Senses

2 senses
As verb
  1. 1

    To secure a loan or obligation by pledging specific assets as collateral that can be seized in case of default.

    "The bank required the startup to collateralize its commercial real estate before issuing the line of credit."
  2. 2

    To convert financial assets, such as loans or mortgages, into tradable securities backed by those assets.

    "Investment firms often collateralize mortgage pools to create mortgage-backed securities for the secondary market."

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Antonyms & Contrasting Words (1)

Linguistic Origin & Historical Etymology

Derived from the noun 'collateral' (from Medieval Latin 'collateralis', meaning side-by-side or parallel, from 'com-' together + 'lateralis' of the side), combined with the English verbal suffix '-ize'. Evolving in financial and legal contexts during the 20th century, it shifted to describe the specific action of pledging assets as security for a debt.

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