Definition

1. Noun:
   • A type of long-term debt instrument: A "debenture bond" is a formal written acknowledgment of a debt issued by a company or government. It promises to repay the principal amount on a specified future date and to pay periodic interest at a fixed rate. It is typically not secured by physical assets or collateral, relying instead on the general creditworthiness and reputation of the issuer.

Usage Examples

• Noun:
  • The corporation raised capital by issuing a debenture bond with a 5% coupon rate.
  • Investors considered the debenture bond a safe investment due to the government's strong credit rating.

Advanced Usage

• "Unsecured debenture bond": A bond backed only by the issuer's general credit, not by a lien on specific assets.

  • The company's unsecured debenture bond carried a higher interest rate to compensate for the increased risk.

• "Convertible debenture bond": A bond that can be converted into a specified number of shares of the issuing company's common stock.

  • He held a convertible debenture bond, which allowed him to become a shareholder if the stock price rose sufficiently.

Variants and Related Words

• Debenture (n): Often used synonymously with "debenture bond," referring to the same type of unsecured debt instrument.

  • The company's debentures are traded on the major exchanges.

• Bond (n): A broader category of debt securities. A debenture bond is a specific type of bond.

  • Government bonds are generally considered low-risk investments.

Synonyms

• Unsecured bond: A bond not backed by collateral.
• Note: A written promise to pay a debt (can be shorter-term).
• IOU (Informal): An informal acknowledgment of a debt.

Related Phrases

• Issue a debenture bond: The act of a company or government offering these bonds for sale to raise money.

  • The board voted to issue a debenture bond to finance the new factory.

• Debenture bondholder: An investor who owns a debenture bond.

  • As a debenture bondholder, she receives interest payments every six months.

Related Idioms

• : This idiom, while not containing the word "debenture bond," relates to the concept of credit and trustworthiness inherent in such instruments. It means to be completely trustworthy and reliable in keeping one's word.
  • You can trust him; he's as good as his bond.

Noun

1. the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future