Debenture bond


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Debenture bond

An unsecured bond whose holder has the claim of a general creditor on all assets of the issuer not pledged specifically to secure other debt. Compare subordinated debenture bond and collateral trust bonds.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Debenture

A debt security, issued by a government or large company, that is not secured by an asset or lien, but rather by the all issuer's assets not otherwise secured. That is, a debenture carries no collateral and is considered unsecured; in case of bankruptcy, the debenture holder is considered a general creditor. A debenture can be traded, and the term is often interchangeable with a bond. Debentures issued by governments are considered risk-free. See also: Treasury security.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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These bonds are not secured with assets but are debenture bonds, subordinate to bank debt.
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