{"id":11881,"date":"2018-01-06T05:00:08","date_gmt":"2018-01-06T05:00:08","guid":{"rendered":"https:\/\/reunitethestates.org\/?page_id=11881"},"modified":"2018-01-06T05:02:01","modified_gmt":"2018-01-06T05:02:01","slug":"debenture","status":"publish","type":"page","link":"https:\/\/reunitethestates.org\/?page_id=11881","title":{"rendered":"Debenture – a voucher for an indebtedness, issued by a corporation, and though unsecured, it is secured only by the debtor\u2019s earning power based on a pledge of income, not by a lien on any specific asset"},"content":{"rendered":"

debenture<\/span>:<\/strong><\/span>
\n[fr. Latin debentur \u201cthere are owed\u201d]
\n(15c)<\/span><\/p>\n

l. A debt secured only by the debtor\u2019s earning power, not by a lien on any specific asset.\u00a0 *\u00a0 Originally, this was the first word of a deed detailing sums acknowledged to be owed. <\/span><\/strong><\/p>\n

2. An instrument acknowledging such a debt.<\/strong> \u2014 aka certificate of indebtedness<\/strong><\/em><\/span>. <\/span><\/p>\n

3. A bond that is backed only by the general credit and financial reputation of the corporate issuer, not by a lien on corporate assets.<\/strong>\u00a0\u2014 aka debenture bond<\/strong><\/em><\/span>; unse<\/strong><\/em><\/span><\/span>cured bond<\/strong><\/em><\/span>; naked debenture<\/strong><\/em><\/span>; plain bond<\/strong><\/em><\/span>. Cf. BOND (3). [1]
\n<\/span><\/p>\n

1. A voucher for an indebtedness; a corporate bond, often unsecured, in other instances secured by a pledge of income only.<\/strong><\/span>
\n\u00a0\u00a0\u00a0\u00a0 See mortgage debentures<\/em>. [2]<\/span><\/p>\n

1. An unsecured, long-term corporate bond or note.<\/span><\/strong>
\n\u00a0\u00a0\u00a0\u00a0 See long-term<\/em>. [3]<\/span><\/p>\n

\n

\u00a0\u00a0\u00a0\u00a0\u00a0 Excerpt from Thomas Froude & Eric V.E. White’s The Practice Relating to Debentures<\/em><\/a> (1935):<\/span><\/strong><\/p>\n

\u00a0\u00a0\u00a0\u00a0 \u201cThe word \u2018debenture\u2019 in its archaic sense was applied to a form given under seal as an acknowledgment for goods supplied to the Royal Household, and as such probably meant a charge on Public Funds. The term was further applied to drawback certificates issued for repayment, on the exportation of goods, of duty which had already been paid upon them, and this term is still so used by HM. Customs. . . . The word is now, however, generally used to indicate lan acknowledgment of indebtedness given under seal by an incorporated company, containing a charge on assets of\u2018the company, and carrying an agreed rate of interest until payment, but the variety of the forms which a debenture may take makes it difficult to find a good general definition in any reported case.<\/span>\u201d<\/strong> [4]<\/span><\/p>\n

Various Types of Debentures:<\/span><\/strong><\/p>\n

convertible debenture<\/span>:<\/strong><\/span> (1908) A debenture that the holder may change or convert into some other security, such as stock.<\/strong><\/span><\/p>\n

convertible subordinated debenture<\/span>:<\/strong><\/span> (1961) A debenture that is subordinate to another debt but can be converted into a different security.<\/strong><\/span><\/p>\n

fixed and floating debenture<\/span>:<\/strong><\/span>\u00a0 See fixed and floating charge<\/em> under CHARGE (7).<\/span><\/p>\n

sinking-fund debenture<\/span>:<\/strong><\/span> (1893) A debenture that is secured by periodic payments into a fund established to retire long-term debt.<\/strong><\/span><\/p>\n

subordinate debenture<\/span>:<\/strong><\/span> (1929) A debenture that is subject to the prior payment of ordinary debentures and other indebtedness.<\/strong><\/span><\/p>\n

4.<\/strong> English law<\/em>. A company\u2019s security for a monetary loan. *\u00a0 The security usually creates a charge on company stock or property. <\/strong><\/span><\/p>\n

5. A customhouse certificate providing for a refund of the duties on imported goods when the importer reexports the goods rather than selling them in the country where they were imported.<\/span><\/strong><\/p>\n

debenture bond<\/span>:<\/strong>\u00a0 <\/span>See DEBENTURE (3). <\/span><\/p>\n

debenture indenture<\/span>:<\/strong><\/span>\u00a0 See INDENTURE (2).<\/span><\/p>\n

debenture stock<\/span>:<\/strong><\/span> (1863) 1. Stock that is issued under a contract providing for periodic, fixed payments.<\/strong>\u00a0 <\/span>2.<\/strong> English law.<\/em> A type of bond representing money borrowed by a company using its property or other fixed assets as security.<\/strong><\/span><\/p>\n

References:<\/span><\/span><\/strong><\/p>\n

Disclaimer:<\/span><\/span><\/strong> All material throughout this website is compiled in accordance with Fair Use<\/a><\/span><\/strong>.<\/strong><\/p>\n

[1]: Black\u2019s Law Dictionary\u00a0Deluxe Tenth Edition\u00a0by Henry Campbell Black & Editor in Chief Bryan A. Garner<\/a>. ISBN: 978-0-314-62130-6<\/span><\/strong><\/p>\n

[2]: Ballantine\u2019s Law Dictionary\u00a0<\/a><\/span><\/strong>with Pronunciations
\n<\/span><\/em>Third Edition<\/span><\/strong><\/a>\u00a0by James A. Ballantine\u00a0<\/span><\/strong>(James Arthur 1871-1949).\u00a0\u00a0<\/span><\/em>Edited by William S. Anderson.\u00a0\u00a0\u00a9 1969 by THE LAWYER\u2019S CO-OPERATIVE PUBLISHING COMPANY.\u00a0 Library of Congress Catalog Card No. 68-30931<\/span><\/strong><\/p>\n

[3]: Ballantine’s Law Dictionary <\/a><\/span><\/strong>Legal Assistant Edition<\/span><\/a><\/em>
\nby Jack Ballantine\u00a0<\/span><\/strong>(James Arthur 1871-1949).\u00a0\u00a0<\/span><\/em>Doctored<\/span><\/a><\/strong>\u00a0<\/span><\/em>by\u00a0Jack G. Handler,\u00a0J.D.<\/a>\u00a0\u00a9 1994 Delmar by Thomson Learning.\u00a0 ISBN 0-8273-4874-6.<\/span><\/strong><\/p>\n

[4]: Thomas Froude & Eric V.E. White, The Practice Relating to Debentures<\/em><\/a> 1 (1935).<\/span><\/strong><\/p>\n

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