Debenture Finance

A type of long term debt raised after a company sells debenture certificates to the holder and raises finance in return. The term debenture has its source from 'DEBOE' that means 'I owe' and is therefore a certificate or document which evidences debt of long term nature whereby the person named therein will have given the issuing company the amount generally less than the total par value of the debenture. These debentures generally mature among 10 to 15 years although may be endorsed, negotiated, discounted or provided as securities for loans whether as case they will have been liquidated before when their maturity date. The recent interest rate is payable twice a year and it is a legal obligation.