InvestorQ : Can you throw some light on what is meant by the term secured redeemable debenture?
Niti Shenoi made post

Can you throw some light on what is meant by the term secured redeemable debenture?

Answer
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swati Bakhda answered.
1 year ago


Secured refers to the security given by the issuer for the loan transaction represented by the debenture. This is usually in the form of a first mortgage or charge on the fixed assets of the company on a pari passu basis with other first charge holders like financial institutions etc. Sometimes, the charge can also be a second charge instead of a first charge. Very often, the charge is created on behalf of the entire pool of debenture holders by a trustee who is specifically appointed for the purpose.

Redeemable refers to the process whereby the debenture is extinguished on payment of all the obligations due to the holder after the repayment of the last instalment of the principal amount of the debenture.