debenture

A document that states the terms of a loan, usually to a company, including the date of repayment and the rate of interest. The debt, which is usually long-term, may be secured by a *charge on company property; a naked debenture is simply an undertaking to repay. A debenture may be issued to an individual creditor (a debenture holder) or a debenture trust deed may be drawn up in favour of trustees for a large group of creditors (debenture stock holders). Capital derived from the issue of debentures is termed loan capital. Compare *share.