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Finance Dictionary and Glossary of Investment Terms
Debenture
Definition 1.
Any debt obligation backed strictly by the borrower's integrity, e.g. an unsecured bond. A debenture is documented in an indenture.
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Definition 2.
An unsecured debt backed only by the credit worthiness of the borrower.
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Definition 3.
A bond issued without specific security. In the event of a crisis, holders of debentures take a back seat to other bondholders. To compensate for the added risk, debentures usually pay higher interest than secured bonds, or offer conversion to common stock.
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Definition 4.
An unsecured bond backed solely by the general credit of a company.
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