debenture investment & finance definition
In
general, an unsecured debt, often an unsecured bond backed only by the
integrity or creditworthiness of the issuer (and not by any form of collateral,
such as property or inventory or some other asset). Debentures are governed by
agreements known as indentures, which are subject to the Trust Indenture Act of
1939.
See debenture in Wall Street Words
A corporate bond that is not secured by specific property. In the event that the issuer is liquidated, the holder of a debenture becomes a general creditor and therefore is less likely than the secured creditors to recover in full. Because of their high risk factor, debentures pay higher rates of interest than secured debt of the same issuer. See also
subordinated debenture.
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