debenture
UK[dɪˈbɛntʃə]US[dɪˈbɛntʃər]
n
a type of long-term loan taken by a company that pays a fixed rate of interest and is not secured by physical assets.
n
a certificate or bond acknowledging such a debt.
Etymology
the word 'debenture' entered english in the late 15th century from the latin phrase 'debentur mihi', meaning 'there are owing to me', found in medieval latin certificates of debt. it is the passive plural form of the verb 'debere', meaning 'to owe'. the term was originally used for any written acknowledgment of a debt before its meaning narrowed in finance to specify an unsecured corporate bond. the core logic of the word, from its latin origin, is rooted in the concept of indebtedness and formal promise to repay, which remains central to its modern financial definition.
Analysis
the word is a simplex loanword from latin, adopted as a whole into english. it does not contain separable, meaningful english morphemes derived from its latin roots.
Examples
the company raised capital by issuing a series of debentures to institutional investors.
as it is an unsecured debenture, it carries a higher interest rate to compensate for the increased risk.
the debenture holders receive their fixed interest payments before any dividends are distributed to shareholders.