26 April 2010
Bonds and debentures are fixed income instruments which are taken by investors looking for regular, fixed income through payment of interest on the principal purchase.
Bonds and debentures are debt instruments with different types of exposure. In general terms bondholders are secured by access to the underlying asset in case of default by the issuer. Debentures, on the other hand, are unsecured, and debenture holders do not have recourse to assets in the case of default by the debenture issuer.
26 April 2010
Debenture and bonds are similar except for one difference- bonds are more secure than debentures.A debenture is an unsecured loan you offer to a company. The company does not give any collateral for the debenture but pays a higher rate of interest to its creditors and bondholders are paid low interest. In case of bankruptcy or financial difficulties, the debenture holders are paid later than bondholders.
26 April 2010
The major difference lies in Securitisation i.e. Bond holder can underlie the companies asset comparatively more than Debenture holder. And another difference is Debenture issued by the Government enterprise is called as bond.
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