debenture

A Dictionary of Accounting,  January, 1999  by R. HUSSEY

• E-mail
• Print
• Link

debenture 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 debentures, are not. In the USA debentures are usually unsecured, relying only on the reputation of the borrower. In a ...

Read the rest of this article with a Free Trial at HighBeam Research.