Changes

A '''debenture''' is an unsecured [[debt]].  It is simply a promise by the borrower to repay the lender.  A debenture will mature on a specific day and state an interest rate.  This rate may be fixed, or tied to some sort of index, such as LIBOR or the Federal Funds rate.

A '''debenture''' is an unsecured [[debt]].  It is simply a promise by the borrower to repay the lender.  A debenture will [[mature]] on a specific day and state an [[interest rate]].  This rate may be [[fixed]], or tied to some sort of [[index]], such as [[LIBOR]] or the [[Federal Funds rate]].

Most corporate bonds are debentures.  The rate of interest a corporation will pay on its bonds is a function of the market's perceived risk of the corporation being unable to repay the debt.  Debentures may also be issued by privately held corporations.

Most [[corporate bonds]] are debentures.  The rate of interest a corporation will pay on its bonds is a function of the market's perceived [[risk]] of the corporation being unable to repay the debt.  Debentures may also be issued by [[privately held]] corporations.

It differs from a '''mortgage bond''' because the latter had a real asset (such as a house or factory) that could be sold to pay off the debt.

It differs from a [[mortgage bond]] because the latter had a real [[asset]] (such as a house or factory) that could be sold to pay off the debt.

[[Category:Finance]]

[[Category:Finance]]

[[Category:Business]]

[[Category:Business]]