What Is Debenture Loans?

Answer

Debentures (or loan stock) exist as an alternative form of investing in a company that is more secure than investing in shares because interest payments must be made by the company and must be paid before dividends. Dividends, in contrast to debentures, are paid at the company's discretion.
1 Additional Answer
Debenture loans are long term loans, usually taken by companies where they agree to pay at a specified future date. The loan is repaid in a fixed rate of interest to the debenture holder annually until maturity. Should the company fail to pay either the interest or principal amount at maturity of the loan; the debenture holders can force the company into liquidation to pay the amount due.
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