When debenture interest is payable?

5. What is the interest rate on the 2020 Debentures and when is interest paid? Interest is paid in cash at a rate of 6% per annum. Interest is paid monthly in arrears on the last day of each month commencing February 29, 2016 (each, an “Interest Payment Date”).

What is debenture payable?

In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. … A debenture is thus like a certificate of loan or a loan bond evidencing the company’s liability to pay a specified amount with interest.

How is interest on debentures paid?

Typically, interest on debentures is paid at a fixed rate on their face value systematically. It must be noted that such an interest is a charge on debenture issuing company’s profit and must be paid to the holders, irrespective of the revenue status.

What is a debenture interest?

Meaning of debenture interest in English

an amount of money paid regularly to the lenders on debentures: Debenture interest has to be paid by a company whether it makes a profit or not.

What is an example of a debenture?

A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income. … Examples of debentures are Treasury bonds and Treasury bills.

Is a debenture a loan?

A debenture is a loan agreement in writing between a borrower and a lender that is registered at Companies House. It gives the lender security over the borrower’s assets. Typically, a debenture is used by a bank, factoring company or invoice discounter to take security for their loans.

What are the risks of debentures?

Debentures also carry interest rate risk. 4 In this risk scenario, investors hold fixed-rate debts during times of rising market interest rates. These investors may find their debt returning less than what is available from other investments paying the current, higher, market rate.

Why do companies pay debenture interest?

The company has to pay the interest to its debenture holders if the company acquires any profit. The interest on debentures is a charge to the profit of the company. … The debenture holders can assign the TDS amount against the tax that is due from them.

How often do debentures pay interest?

TIPS pay interest every six months and are issued with maturities of five, ten, and 30 years.