Debentures

Formal

Relating to a loan, this is the Certificate or voucher acknowledging the existence of a debt. Often listed on the Balance Sheet, it shows the company’s obligation to repay such a loan or ‘Debenture’ the rate of interest due, and the timing of its repayment.

Real-world Example

A company raises £10M by issuing debentures to investors - a form of long-term, secured loan that pays fixed interest and must be repaid on a set date, ranking ahead of shareholders if the company fails.