Bonds vs. Debenture — What's the Difference?

Plural of bond

In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. The legal term "debenture" originally referred to a document that either creates a debt or acknowledges it, but in some countries the term is now used interchangeably with bond, loan stock or note.

Imprisonment, captivity

A certificate or voucher acknowledging a debt.

The condition of goods in a bonded warehouse until duty is paid

An unsecured bond issued by a civil or governmental corporation or agency and backed only by the credit standing of the issuer.

A customhouse certificate providing for the payment of a drawback.

A certificate that certifies an amount of money owed to someone; a certificate of indebtedness.

(obsolete) A certificate of a loan made to the government; a government bond.

A type of debt instrument secured only by the general credit or promise to pay of the issuer, not involving any physical assets or collateral, now commonly issued by large, well established corporations with adequate credit ratings.

A document granting lenders a charge over a borrower’s physical assets, giving them a means to collect a debt, as part of a secured loan.

A writing acknowledging a debt; a writing or certificate signed by a public officer, as evidence of a debt due to some person; the sum thus due.

A customhouse certificate entitling an exporter of imported goods to a drawback of duties paid on their importation.

Any of various instruments issued, esp. by corporations, as evidences of debt. Such instruments (often called debenture bonds) are generally, through not necessarily, under seal, and are usually secured by a mortgage or other charge upon property; they may be registered or unregistered. A debenture secured by a mortgage on specific property is called a mortgage debenture; one secured by a floating charge (which see), a floating debenture; one not secured by any charge a naked debenture. In general the term debenture in British usage designates any security issued by companies other than their shares, including, therefore, what are in the United States commonly called bonds. When used in the United States debenture generally designates an instrument secured by a floating charge junior to other charges secured by fixed mortgages, or, specif., one of a series of securities secured by a group of securities held in trust for the benefit of the debenture holders.

A bond that is backed by the credit of the issuer but not by any specific collateral

A certificate or voucher acknowledging a debt