Debenture & Convertible Debenture
Debenture is a type of debt instrument issued by a company or government entity to raise capital. It is essentially a loan agreement where the issuer promises to pay back the principal amount along with interest at regular intervals, typically semi-annually or annually, until the maturity date. Debentures are unsecured, meaning they are not backed by any specific asset or collateral, but are instead supported by the issuer’s creditworthiness.
Convertible Debenture is a type of debenture that gives the holder the option to convert the debt into a predetermined number of equity shares of the issuing company, usually at a fixed conversion price. This feature provides the bondholder with an opportunity to benefit from the appreciation of the company’s stock.
Source: SEC and SET
