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debenture

/dɪˈbɛntʃər/  ·  say it: dih·BEN·chur

a long-term loan secured only by the borrower's general credit

In Banking & Finance

In more detail

1. (noun) a certificate or bond issued by a company or government that represents a loan; the holder receives regular interest payments and is repaid the principal amount at a fixed future date

2. (noun) in British legal usage, a document that gives a creditor a claim against a company's assets as security for a loan

Examples

• 1. The company issued debentures to raise money for expanding its factories.
• 2. The bank held debentures as collateral for the large loan it had made to the corporation.

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