debenture

A debenture is a type of loan certificate issued by a company or public body. It represents an obligation to repay borrowed funds along with interest. In Great Britain, debenture stock is common and may not have a fixed maturity date for the principal, but it has a fixed claim to interest payments that take precedence over stocks.12

Debentures are typically secured by all or part of the issuer's property. Certificates with attached interest coupons are usually issued to lenders. If the issuer defaults, the debenture holder can appoint a receiver to seize assets and repay the secured money. A debenture is essentially a bond backed by the issuer's general credit rather than a specific lien on particular assets.13