Bonds and Debentures

Bonds are debt instruments backed by the asset of the issuer. The issuer owes the holders a debt and is obliged to pay them interest or to repay the principal at a later date, termed the maturity date.

A debenture is also a type of debt instrument. But, it is not backed by any security, asset or collateral and the credit worthiness of the issuing company is the only security.

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