What is a debenture & how does it work?

The legal term "debenture" originally referred to a document that either creates a debt or acknowledges it, but in some countries the term is now used interchangeably with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the company's liability to pay a specified amount with interest.

What type of debt is a debenture?

A great deal of corporate debt is in the form of debentures, but the government and government entities also issue debentures (Treasury securities are one example). Like other bonds, investors can purchase debentures through brokers. Debentures are usually issued in $1,000 or $10,000 denominations of varying maturities.

What is a bond debenture?

A debenture is a form of unsecured debt instrument that a company or government issues at a particular coupon rate to acquire funds from the public, for example, an unsecured bond. What is the difference between bond and debenture?