WordValedebenture
a long-term loan secured only by the borrower's general credit
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.
How to use debenture
Debenture is a formal financial term used primarily in corporate finance and legal contexts. It refers to a debt instrument with a specific maturity date and fixed interest rate, commonly issued by large corporations or governments. The term is particularly prevalent in British English and legal documents, though it appears in American financial contexts as well. It differs from a stock in that it represents a loan rather than ownership.
Common phrases
- issue a debenture
- debenture holder
- debenture bond
- convertible debenture
- secured debenture
Synonyms
bond · loan certificate · security · note
Word family
debenture holder (noun) · debentures (plural)
A common mistake
Learners sometimes confuse debentures with equities or stocks, misunderstanding that debenture holders are creditors (lenders) rather than owners of the company.
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