debentures

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

debentures

a means of financing companies through fixed-interest LOANS secured against company ASSETS. In some cases the company may offer a specific asset such as a particular machine as security for the loan (fixed charge); in other cases lenders are offered security by means of a general claim against all company assets in the event of default (floating charge). Most debentures are redeemable by the borrower at a future specified date, say 10 or 15 years from the date of issue. Some debentures, however, are irredeemable and never have to be repaid, the lender continuing to be rewarded through interest payments forever. See LOAN CAPITAL, CONVERTIBLE LOAN STOCK.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

debentures

a means of financing companies through fixed-interest LOANS secured against company ASSETS.

In some cases the company may offer a specific asset, such as a particular machine, as security for the loan; in other cases lenders are offered security by means of a general claim against all company assets in the event of default. See LOAN CAPITAL.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005