Difference between Debentures and Bonds

Prime objective of this article is to discuss on Difference between Debentures and Bonds. Debentures and bonds are debt instruments with several types of risk exposure. Generally bondholders are secured by access to the underlying asset in the case of default by the company. In contrast, debentures are unsecured and holders do not have recourse to assets should the debenture issuer defaults. Debentures are backed only because of the general creditworthiness and trustworthiness of the issuer. The interest rate offered on bonds depends on many factors, including the maturity plus the credit rating of the particular issuer.