Collateralized bonds pledge securities to protect bondholders against loss in case of default. An example of collateralized bonds are collateralized mortgage obligations (CMOs) sold by firms and agencies involved in the housing market; the CMO is backed by a pool of mortgages. Other examples of collateralized bonds include bonds backed by credit card receivables and bonds backed by car loans. The issuer pays interest and principal on such a collateralized bond over time as homeowners, credit card users, and car buyers pay off their own loans.