Distinguish between Unsecured debentures and secured debentures

Unsecured debentures
These are debentures that are naked i.e. They have no charge or security to secure the amount borrowed. The creditor can only sue the debtor in the event of default.

Secured debenture
• This is a debenture which contain a charge over the assets of the company.
• May be secured by a fixed or floating charge or both.

Leave a Reply

Your email address will not be published. Required fields are marked *