{"id":3375,"date":"2021-07-14T19:20:25","date_gmt":"2021-07-14T13:50:25","guid":{"rendered":"https:\/\/www.goseeko.com\/blog\/?p=3375"},"modified":"2026-04-01T05:39:46","modified_gmt":"2026-04-01T00:09:46","slug":"what-are-debentures","status":"publish","type":"post","link":"https:\/\/www.goseeko.com\/blog\/what-are-debentures\/","title":{"rendered":"What are Debentures?"},"content":{"rendered":"\n

“Debenture<\/strong>s<\/a>” comes from the Latin word “debere” which means “borrow”. It is a written means given by a company that recognizes debt receivable from the public.<\/p>\n\n\n\n

Furthermore, the Companies Act defines it as “Bonds includes other securities, whether or not they constitute a claim against a company’s assets.”<\/p>\n\n\n\n

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Debentures Characteristics<\/strong><\/h2>\n\n\n\n

As a means of investment, corporate bonds have several advantageous features. Includes several features of bonds \u2013<\/strong><\/p>\n\n\n\n

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  • Firstly, this is a preferred investment option as income determination is by a fixed income rate and investment is secured by billing the company’s assets. <\/li>\n\n\n\n
  • Fixed returns at lower risk are the preferred investment tool for everyone.<\/li>\n\n\n\n
  • Secondly, the holding company bonds do not imply ownership of the company. Therefore, bondholders do not have the right to vote or control the control of the issuing institution. <\/li>\n\n\n\n
  • Nevertheless, in the case of default returns, they can take legal action against the organization.<\/li>\n\n\n\n
  • Further more due to their high par value, corporate bonds provides higher returns than equity investments.<\/li>\n\n\n\n
  • Moreover when liquefying a company, bondholders get priority in repaying the borrowing amount.<\/li>\n\n\n\n
  • In addition, it affiliates to oblige to return their debts to bondholders at a given interest rate, regardless of profit or loss.<\/li>\n<\/ul>\n\n\n\n
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