The different types of debentures

The different types of debentures

  • Mortgage/secured debentures; these are debentures which have a security attached to them or some property pledged against them. These debentures are fully backed up by some company assets.




    • Naked/un secured debentures; these are debentures which have no security attached to them hence in case of failure of the company to pay, the debenture holder has no right to sell the company¬ís property to recover his money.Redeemable debentures; these are debentures that are bought back by the company after a given period of time and the debenture holder is given interest for the period held.
    • Irredeemable debentures; these are debentures that are not bought back by the company hence the money borrowed remains owing until the company is dissolved.

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mwaikusa

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