A corporate bond that is not secured by specific property. In the event that the issuer is liquidated, the holder of a debenture becomes a general creditor and therefore is less likely than the secured creditors to recover in full. Because of their high risk factor, debentures pay higher rates of interest than secured debt of the same issuer. See also subordinated debenture.
Main Entry: de·ben·ture Pronunciation: di-'ben-ch&r Function: noun Etymology: Anglo-French debentour and Medieval Latin debentura, perhaps from Latin debentur they are owed : an unsecured bond that is backed by the issuer's general credit rather than a specific lien called also debenture bond —see also INDENTURE —compare mortgage bond at BOND NOTE: Debentures are often convertible to stocks.
[di-ben-cher] 
