3. Long-term debt securities Long-term debt securities have maturities greater than one year and are typically characterized by periodic interest payments. Long-term debt securities can usually be classified as either term loans or bonds. A term loan is a privately arranged contract in which the borrower agrees to make a series of interest and principal payments to a lender, usually a bank, insurance company, or pension fund. A bond is a long-term contract under which the borrower (issuer) agrees to make interest and principal payments to its bondholders (investors), Term loans and bonds exhibit differing characteristics and advantages. True or False: In general, term loans can be created more quickly than bond issues because they (1) tend to be negotiated directly with the lender, (2) require less formal documentation than bond issues, and (3) are not registered with the Securities and Exchange Commission (SEC). O False O True True or False: In general, term loans incur lower issuance costs than bond issues because (1) they require less formal documentation than bond issues, and (2) they are not registered with the Securities and Exchange Commission (SEC). False True