Editing Debenture (section)

==Attributes==

* A movable property or assets
* Issued by a company in the form of a certificate of indebtedness
* Generally specifying the dates of redemption, repayment of principal and payment of interest
* May or may not create a charge on the assets of the company<ref name="Legal Services India" />
* Corporations in the US often issue bonds of around $1,000, while government bonds are more likely to be $5,000

Debentures gave rise to the idea of the rich "clipping their coupons", which means that a bondholder will present their "coupon" to the bank and receive a payment each quarter (or in whatever period is specified in the agreement).

There are also other features that minimize risk, such as a "sinking fund", which means that the debtor must pay some of the value of the bond after a specified period of time. This decreases risk for the creditors, as a hedge against inflation, bankruptcy, or other risk factors. A sinking fund makes the bond less risky, and therefore gives it a smaller "coupon" (or interest payment). There are also options for "convertibility", which means a creditor may turn their bonds into equity in the company if it does well. Companies also reserve the right to call their bonds, which mean they can call it sooner than the maturity date. Often there is a clause in the contract that allows this; for example, if a bond issuer wishes to rebook a 30-year bond at the 25th year, they must pay a premium. If a bond is called, it means that less interest is paid out.

Failure to pay a bond effectively means bankruptcy. Bondholders who have not received their interest can throw an offending company into bankruptcy, or seize its assets if that is stipulated in the contract.