Definition

Noun: A formal, written document that serves as a promise or guarantee to repay a borrowed sum of money, typically including specified terms such as interest and a maturity date. It represents an obligation of the issuer (the debtor) to the holder (the creditor).

Usage

This term is a formal financial and legal term. It is used to describe a specific type of debt instrument. * A certificate of indebtedness is issued by a borrower to a lender as evidence of the debt. * It is a written promise, meaning its terms are legally binding and documented. * The primary purpose is to repay a debt, distinguishing it from equity instruments which represent ownership.

Examples

• The corporation raised capital by issuing a certificate of indebtedness to private investors.
• Upon reviewing the certificate of indebtedness, the lawyer confirmed the repayment schedule and interest rate.
• The government's certificate of indebtedness is considered a very secure investment.

Advanced Usage

• In historical contexts, certificates of indebtedness were sometimes used by governments to finance wars or large projects.
• The term can be used more broadly in legal contexts to refer to any documented acknowledgment of a debt, though it is more specific than a simple IOU.

Variants and Related Words

• Debenture: A type of long-term certificate of indebtedness not secured by physical assets or collateral.
• Bond: Often used synonymously, though bonds are typically long-term, publicly traded debt instruments.
• Note (or Promissory Note): A simpler, often shorter-term written promise to repay a debt.
• IOU: An informal acknowledgment of a debt (an acronym for "I owe you"), which is less formal and legally detailed than a certificate of indebtedness.

Synonyms

• Debt instrument
• Promissory note
• Bond (in a general sense)
• Debenture

Antonyms

• Certificate of ownership
• Equity share
• Stock certificate

Related Phrases

• Issue a certificate of indebtedness: The act of creating and selling the debt instrument.
• Hold a certificate of indebtedness: To be the creditor or owner of the debt promise.
• Redeem a certificate of indebtedness: To repay the debt as specified, often at maturity.

Noun

1. a written promise to repay a debt