Private businesses and governments sometimes issue debt securiti𝄹es to raise additional capital. These debt instruments are called debentures whenever they are not🌳 secured by any form of collateral.

Debentures, which otherwise act much like any other kind of bond, are ostensibly only backed by the faith and credit of the issꦅuing institutions. Debentures should not be confused with debenture stocks, which are a type of equity se☂curity that act much more like a pref🍬erred stock than a bond.

Debenture Stocks

Debenture stockholders are entitled to 澳洲幸运5官方开奖结果体彩网:dividend payments at fixed intervals. Like regular debentures, debenture stocks are normally not backed by any collateral. However, a form of protection may be sought through a 澳洲幸运5官方开奖结果体彩网:trust deedꩵ that names a trustee to act on behalf of♕ stockholders.

The way that debenture stocks operate is nearly identical to 澳洲幸运5官方开奖结果体彩网:preferred stock.

Debenture stocks are not perceived to be less safe than other equities since they carry the same degree of risk as🤡 other types of stock issues. Unlike traditional stocks, debenture stocks provide a more reliable stream of returns.

Debentures

Regular debentures act as loans against the company, which make the owner of the debenture a 澳洲幸运5官方开奖结果体彩网:creditor with preferred status in case of liquidation. Debenture stocks are an equity security, not a loan. This means debenture stockholders are put in a position behind debentur♓es and all other forms of debt for liquidation purposes.

Debentures are perceived to be less safe than other bonds because they lack collateral security, although an exception is made in the case of government debentures such as 澳洲幸运5官方开奖结果体彩网:U.S. Treasury Bills.