Quick Definition

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

Examples

• 1A corporation issues debentures to raise capital for expanding its manufacturing facilities.
• 2A government body issues debentures to fund public infrastructure projects like highways and schools.
• 3An investment in corporate debentures that offer a fixed interest rate for the term of the security.

Tags