A debenture is a type of debt instrument that is not backed by any collateral. Instead, debentures are supported only by the general credit of the issuer. These instruments are typically used by corporations and governments to raise capital. Debentures are usually issued in the form of a bond or a note and pay a fixed rate of interest to the holder. Investors who purchase debentures are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at maturity.
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