Definition, Meaning & Synonyms

debenture

Noun

/dɪˈbɛn.tʃər/

Definition

A debenture is a type of debt instrument that is not secured by physical assets or collateral. Instead, it is backed only by the general creditworthiness and reputation of the issuer.

Examples

Company A issued a debenture to raise funds for its expansion project.
The government has decided to increase its debenture offerings to finance public infrastructure.
Investors often consider debentures to diversify their investment portfolios.

Meaning

A debenture is essentially a loan that an investor makes to a company or government, which promises to repay the amount at a specified future date, along with interest payments.