Convertible Debenture

Business, Legal & Accounting Glossary

Definition: Convertible Debenture


Convertible Debenture

Quick Summary of Convertible Debenture


Debenture which can be converted into stock at the option of the holder and/or the issuer at a specified date in the future. Because the buyer has the ability to convert the debenture into stock under certain circumstances, the seller is able to borrow at a lower cost than if the convertibility feature was not present.




Full Definition of Convertible Debenture


Convertible Debentures are debt instruments that entitle the lender to exchange the right to receive principal and interest payments into stock of the borrowing company. Subordinated convertible debentures are sometimes used in lieu of convertible preferred stock to fund a portion or all of a company’s funding needs. These convertible debentures are usually less attractive to growing companies because they accrue interest and require scheduled repayments unless and until they are converted.


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Definition Sources


Definitions for Convertible Debenture are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 30th December, 2021 | 0 Views.