Debentured definitions
| Word backwards | derutnebed |
|---|---|
| Part of speech | The word "debentured" is the past participle form of the verb "debenture." It is functioning as an adjective in this form. |
| Syllabic division | de-ben-tured |
| Plural | The plural of the word "debentured" is "debentures". |
| Total letters | 10 |
| Vogais (2) | e,u |
| Consonants (5) | d,b,n,t,r |
Debentures are long-term debt instruments issued by corporations or governments to raise capital. They are essentially a form of loan agreement between the issuer and the investor, where the issuer promises to repay the principal amount along with interest at a specified date in the future. Debentures are one of the most common ways for companies to raise funds for expansion, operations, or other financial needs.
Types of Debentures
There are several types of debentures, such as convertible debentures, non-convertible debentures, secured debentures, unsecured debentures, redeemable debentures, and irredeemable debentures. Each type has its own characteristics and features that appeal to different types of investors.
Convertible Debentures
Convertible debentures are those that can be converted into equity shares of the issuing company after a certain period. This feature provides investors with the potential for capital appreciation if the company performs well.
Non-Convertible Debentures
Non-convertible debentures, on the other hand, cannot be converted into equity shares and offer a fixed rate of return. They are less risky compared to convertible debentures but typically offer lower returns.
Features of Debentures
Some key features of debentures include a fixed maturity date, a specified interest rate, and a repayment obligation by the issuer. They are often secured by the assets of the company, providing investors with a measure of security in case of default. Debentures are usually tradable in the secondary market, allowing investors to buy and sell them before maturity.
Benefits of Debentures
Debentures offer several advantages to both companies and investors. For companies, they provide an alternative source of funding without diluting ownership. For investors, debentures offer a fixed income stream with lower risk compared to equity investments. They are also considered a less risky investment compared to other financial instruments.
Risks of Debentures
While debentures are generally considered less risky than stocks, they still carry some risks. The main risk is the possibility of default by the issuer, leading to a loss of capital for investors. Changes in interest rates and market conditions can also impact the value of debentures in the secondary market. It is essential for investors to carefully assess the creditworthiness of the issuer before investing in debentures.
Debentured Examples
- The company issued a debentured bond to raise capital for expansion.
- Investors were attracted to the debentured securities due to their high yield.
- She inherited a debentured investment portfolio from her grandparents.
- The debentured loan was secured against the company's assets.
- The financial institution offered debentured notes to qualified investors.
- He decided to purchase a debentured bond to diversify his investment portfolio.
- The debentured debt instrument provided a fixed interest rate for a specified period.
- The government issued debentured securities to fund infrastructure projects.
- The company refinanced its debentured loans at a lower interest rate.
- Investors could convert their debentured shares into common stock in the company.