debenture


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Debenture

[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.

debenture

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.

debenture

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

debenture

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 ?
Pursuant to the terms of the Indenture governing the 2012 Debentures, holders of 2012 Debentures that are to be redeemed have the right until the last business day prior to the Redemption Date to convert their 2012 Debentures into common shares of Superior ('Common Shares') at a conversion price of $36.00, being a rate of approximately 27.7778 Common Shares per $1,000 principal amount of 2012 Debentures.
In conjunction, the principal and accrued interest on the company's debentures will total USD644,998 on 31 April 2018.
"The RFU has told him that it will honour his debentures for Rugby World Cup matches in 2015.
"I have told [WRU group chief executive] Roger Lewis that the rights of debenture holders must be upheld.
In Japan, only long-term credit banks, including the defunct Industrial Bank of Japan, are allowed to issue bank debentures to raise financial resources for long-term loans to companies.
Pursuant to the reorganization, X acquires all of the outstanding Y debentures in exchange for an equal amount of X debentures.
Holders of Debentures who validly delivered a consent form prior to the expiry time, as set out in the consent solicitation statement of the Company dated April 22, 2019 (the "Consent Solicitation Statement"), where such consent form was accepted by the Company, are eligible to receive a fee equal to $1.00 per $1,000 principal amount of Debentures.
Those failing to issue or sign a debenture, guaranteeing that the debtor is going to settle his liabilities without being taken to court, will be liable to sanctions of 3,000 to 5,000 euros.
"The debenture system is now a tried and tested method of securing your own seat at the stadium and we know how popular it is with fans."
Claude Resources Inc (TSX: CRJ) (AMEX: CGR), a Canada-based company that explores for mineral resources, has completed an offer to acquire a part of an outstanding 12% senior secured debentures of the company.
Any enquires regarding debentures should be directed to the WRU Debenture Office on 02920 822431/2 or by e-mail debenture@wru.co.uk
In deciding the case, the Minnesota court considered whether Northwest asserted any injury separate and distinct from that to other debenture holders.