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Related to Debentures: preference shares, bonds, Convertible Debentures


[Latin, Are due.] A promissory note or bond offered by a corporation to a creditor in exchange for a loan, the repayment of which is backed only by the general creditworthiness of the corporation and not by a mortgage or a lien on any specific property.

Debentures are usually offered in issues under an Indenture, a document that sets the terms of the exchange. A debenture is usually a bearer instrument. When it is presented for payment, the person in possession of it will be paid, even if the person is not the original creditor. Coupons representing annual or semi-annual payments of interest on the debt are attached, to be clipped and presented for payment on their due dates. They may be deposited in, and collected by, the banks of holders of the debentures, the creditors of the corporation.

A convertible debenture is one that can be changed or converted, at the option of its holder, into shares of stock, usually common stock, at a fixed ratio as stated in the indenture. The ratio can be adjusted in light of stock dividends; otherwise the value of converting the debt into Securities would be worth less than retaining the debenture until its date of maturity.

A subordinate debenture is one that will be repaid only after other corporate debts have been satisfied. A convertible subordinate debenture is one that is subject or subordinate to the prior repayment of other debts of the corporation but which can be converted into another form of security.

A sinking fund debenture is one whereby repayment is secured by periodic payments by the corporation into a sinking fund, an amount of money made up of corporate assets and earnings that are set aside for the repayment of designated debentures and long-term debts.


n. a form of bond certificate issued by a corporation to show funds invested, re-payment of which is guaranteed by the over-all capital value of the company under certain specific terms. Thus, it is more secure than shares of stock or general bonds.


noun bond, negotiable instrument, paper money, pledge, title deed
See also: bond, charge, check, contract, draft, instrument, lien, note, pledge, security, specialty


a document, almost invariably by or on behalf of a company, that creates or acknowledges a debt owed by the company. The term includes debenture stock, bonds and other debt securities issued by a company. Companies usually keep a register of debenture holders. It is a word without precise definite signification. Normally, debentures are issued in connection with secured borrowings and incorporate a fixed or floating charge, but this is not strictly necessary, and debentures can be used in connection with unsecured borrowings.

DEBENTURE. A certificate given, in pursuance of law, by the collector of a port of entry, for a certain sum, due by the United States, payable at a time therein mentioned, to an importer for drawback of duties on merchandise imported and exported by him, provided the duties arising on the importation of the said merchandise shall have been discharged prior to the time aforesaid. Vide Act of Congress of March 2, 1799, s. 80; Encyclopedie, h.t.; Dane's Ab. Index, h.t.

References in periodicals archive ?
The redemption price for the 8 7/8 percent debentures will be $1,018.
The new debentures will be secured by a pool of assets owned by the company, which shall initially consist of the capital stock of certain wholly-owned subsidiaries of the company and/or the company's holdings of stock of certain other companies.
Oakwood also has another outstanding issue of convertible debentures, its 7 1~2 percent convertible subordinated debentures due 2001.
Based on that price, any holder of $1,000 principal amount of Debentures who converted the Debenture on April 30, 1992, would have received Common Stock having a market value (including cash to be paid for fractional share, but without giving effect to commissions and other costs which would likely be incurred on sale and excluding any dividends or interest which may be received), of $1,391.
A debenture with Soccrent Nouvelles Technologies including accrued interest and management fees.
Braaten acquired $3,483,000 principal amount of Debentures at a price of $3,483,000, (including $250,000 of Debentures acquired by BFL under its standby commitment), representing 33 % of the Debentures issued.
The debentures and any common stock issuable upon conversion of the debentures have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Icefloe has the right to fully redeem the Debentures any time prior to maturity for a cash payment in the amount of the principal plus accrued interest and a maturity premium in the amount of $6,250 (the "Maturity Premium") for each Debenture Unit redeemed.
The Redemption Price shall be paid by the Corporation on March 14, 2006 on presentation and surrender of the Debentures at CIBC Mellon Trust Company's office at 199 Bay Street, Commerce Court West, Toronto, Ontario.
Five related parties and insiders of Icefloe have purchased Debentures in the Private Placement.
The Debentures will be issued in minimum amounts of $25,000 (a "Debenture Unit") and bear interest at a rate of ten percent (10%) annually, payable by way of an annual cash payment.