A debenture is a/an:
A) unsecured bond that only best-name corporate borrowers can issue.
B) legal document stating the restrictive covenants on the loan.
C) bond secured by a charge over the assets of the issuer.
D) corporate bond with a credit enhancement.

Question

Quizplus · Accepted Answer

A debenture is a type of bond that is secured by a charge over the assets of the issuer. This means that in the event of the issuer's bankruptcy or default, the assets backing the debenture can be sold to repay the bondholders. Unlike secured bonds, debentures are not backed by a specific asset or group of assets, but rather by the issuer's overall creditworthiness.

A Debenture Is A/an