Editing Debenture (section)

== Convertibility ==

There are two types of debentures:

# '''Convertible debentures''', which are [[convertible bond]]s or bonds that can be converted into equity shares of the issuing company after a predetermined period of time. "Convertibility" is a feature that corporations may add to the bonds they issue to make them more attractive to buyers. In other words, it is a special feature that a corporate bond may carry. As a result of the advantage a buyer gets from the ability to convert, convertible bonds typically have lower [[interest rate]]s than non-convertible corporate bonds.
# '''Non-convertible debentures''',<ref>{{cite web|title=Debenture|url=http://www.investopedia.com/terms/d/debenture.asp|website=Investopedia|access-date=21 February 2017}}</ref> which are simply regular debentures, cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them.{{cn|date=March 2024}} As a result, they usually carry higher interest rates than their convertible counterparts.{{cn|date=March 2024}}