DEBENTURE:

• Debenture is you are lending loan to a company. You will get fixed rate for fixed period.

• It is a debt instrument, which is not backed by collaterals.

• A Debenture is a long term debt instrument issued by government and big institutions for the purpose of raising funds.

•  In return a specific rate of interest is paid to the debenture holder by debenture issuer similar to the case of a loan.

•  Bonds are more secure than debentures.

TYPES OF DEBENTURES:



CONVERTIBLE DEBENTURES: These are converted into some other type of securities.


CORPORATE DEBENTURES: These are issued by companies and they are insecure in nature.


BANK DEBENTURES: These are issued by banks.



GOVERNMENT DEBENTURES: These include treasury bond and treasury bill issued by government. These are risk free investment.



SUBORDINATED DEBENTURES: These are carries a lower payment mode than the other debentures.



CORPORATION DEBENTURES: These are issued by various corporations.



EXCHANGEABLE DEBENTURES: These are convertible debentures, but this debenture can only be converted to the common stock of a subsidiary company.



COLLATERALS:


These are asserts or properties which are provided to secure a loan or any other type of credit.

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