- 1) The most common form of long-term loan taken by a company. It is usually a loan repayable at a fixed date, although some debentures are irredeemable securities; these are sometimes called perpetual debentures Most debentures also pay a fixed rate of interest, and this interest must be paid before a dividend is paid to shareholders. Most debentures are also secured on the borrower's assets, although some, known as naked debentures or unsecured loan stock, are not. In the USA debentures are usually unsecured, relying only on the reputation of the borrower. In a secured debenture, the bond may have a fixed charge (i. e. a charge over a particular asset) or a floating charge. If debentures are issued to a large number of people (for example in the form of debenture stock or loan stock) trustees may be appointed to act on behalf of the debenture holders. There may be a premium on redemption and some debentures are convertible, i. e. they can be converted into ordinary shares on a specified date, usually at a specified price. The advantage of debentures to companies is that they carry lower interest rates than, say, overdrafts and are usually repayable a long time into the future. For an investor, they are usually saleable on a stock exchange and involve less risk than equity2) A deed under seal setting out the main terms of such a loan.3) A form of bank security covering corporate debt, either fixed or floating; in either case the bank ranks as a preferred creditor in the event of liquidation.
Big dictionary of business and management. 2014.
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debenture — de·ben·ture /di ben chər/ n [Anglo French debentour and Medieval Latin debentura, perhaps from Latin debentur they are owed]: an unsecured bond that is backed by the issuer s general credit rather than a specific lien – called also debenture… … Law dictionary
Debenture — De*ben ture (?; 135), n. [L. debentur they are due, fr. debere to owe; cf. F. debentur. So called because these receipts began with the words Debentur mihi.] 1. A writing acknowledging a debt; a writing or certificate signed by a public officer,… … The Collaborative International Dictionary of English
Debenture — Débenture Une débenture est un instrument financier qui a les mêmes caractéristiques qu une obligation, toutefois la débenture n offre aucun bien en garantie. Par conséquent, elle offre moins de couverture pour l acheteur du titre en cas de… … Wikipédia en Français
debênture — s. f. [Brasil] [Economia] Obrigação ao portador. = DEBENTURA ‣ Etimologia: inglês debenture … Dicionário da Língua Portuguesa
debenture — Security instrument evidencing a debt due from one party to another, payable on demand or otherwise, which can be a fixed and/or floating charge on assets and which can grant the lender broad powers to recover the amount due upon default,… … Glossary of Bankruptcy
debenture — (n.) written acknowledgment of a debt, early 15c., from L. debentur there are due (said to have been the first word in formal certificates of indebtedness), passive present third person plural of debere to owe (see DEBT (Cf. debt)) … Etymology dictionary
debenture — [n] certificate of debt bond, I.O.U., promise to pay, voucher; concepts 318,684 … New thesaurus
debenture — ► NOUN Brit. ▪ a bond of a company acknowledging a debt and yielding a fixed rate of interest. ORIGIN Latin debentur are owing (used as the first word of a certificate recording a debt), from debere owe … English terms dictionary
debenture — [di ben′chər] n. [ME debentur < ML < L, 3d pers. pl., pres. pass. indic., of debere: see DEBT: so called from receipts beginning with the Latin words debentur mihi, there are owing to me] 1. a voucher or certificate acknowledging that a… … English World dictionary
debenture — a fixed interest investment in a company, which has priority for interest payments, generally redeemable after the lapse of a specified time Any debt obligation backed strictly by the borrower s integrity, e.g. an un secured bond. A debenture is… … Financial and business terms
debenture — /dabentyar/ Long term unsecured debt instrument, issued pursuant to an indenture. A promissory note or bond backed by the general credit and earning history of a corporation and usually not secured by a mortgage or lien on any specific property;… … Black's law dictionary