What is a debenture as it pertains to commercial real estate?
A debenture is a type of bond or rather a loan certificate given by a company that is unsecured and is supported by credit rather than collateral or physical assets. Debentures rely solely on the creditworthiness of the issuer. Like other bonds, debentures are noted in an indenture. Debentures serve to be one of the most common forms of long term loans and are usually accompanied by a fixed interest rate. Some debentures are even convertible, meaning after a certain period of time, they can be converted into equity shares of the company that issued the debenture.