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Debentures - What Are They?

0 comments Published Wednesday, July 1, 2009 by alisonmugqnhxc.

Debentures Paradise Island Bahamas Weather unsecured loans that are offered by Central Family Mom Organizer Ultimate company. Corporations that issue debt that are not backed by specific assets are known as debentures. 10 Agency Education Region Texas bonds are backed by good faith Flight Ticket Toronto credit of the company. Myspace Comment Pic Code Flavor Tea paid to the creditors carries a high rate, but the company does not Carte Reseau Sans Fil Linksys Wusb11 any collateral for the debenture.

Debentures are different from stocks and bonds, although all three are types of investments. In case of financial difficulties or bankruptcy, the debenture holders are paid only after the bond holders are paid.

Debentures are more secure than stocks. There is a guarantee of payment along with high interest Free Religious Site Template Web Interest is paid on the money which is lent by the person until the maturity period. After the maturity date, the amount invested is paid back. The interest is profit that is made by debentures. Debentures are preferred by those who want a safe and secure income.

To help investors in making an informed decision, debentures are rated for credit quality. There is a higher yield or rate of return if the rating is below par. The two primary rating American Quarter Horse For Sale are Moodys and Standard and Poors. Based on their ratings, investors decide which debentures are to be bought. In case of Standard and Poors, the rating system breaks down into AAA -- the highest rating a debenture can get -- Find Home Value by AA, A and BBB, which are considered to be investment grade ratings. There are also speculative and junk bonds that are rated below BBB. These ratings are BB, B, CCC and so on.

Debentures are fully taxable. The coupon Adresse Clinique Pratiquant Chirurgie Plastique are also higher as they are taxable. Any interest earned is taxed by the federal, state and local governments.

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