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Debenture
Debenture is a long-term debt instrument used by governments and large companies to obtain funds. It is similar to a bond except the securitization conditions are different. A Debenture is usually unsecured in the sense that there are no liens or pledges on specific assets. It is however, secured by all properties not otherwise pledged. In the case of bankruptcy Debenture holders are considered general creditors.
The advantage of Debenture to the issuer is they leave specific assets unencumbered, and thereby leave them open for subsequent financing.
Debentures are generally freely transferrable by the debenture holder.
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See Also
- Debenture is a word or term that appears in the SmallBusiness.com.com Glossary.
