Debenture

In the UK, a debenture is a loan agreement registered at Companies House that gives lenders security over borrowers’ assets. If the borrower defaults, the debenture holder can appoint an administrator to take security of the assets written into the debenture agreement and dispose of them to third parties to recoup loan amounts – after eligible deductions for any preferential creditors. In other jurisdictions, a debenture is another name for a bond. In countries such as India or Brazil, debentures are standard long-term interest-bearing financial instruments issued by companies with fixed maturities.