Debenture Creditors are people who purchase bonds based on the issuer’s full faith and credit. Debenture creditors take more risk than buying as a secure creditor, but the coupon rate and potential returns are higher. When it comes to debenture creditors, there is an order of repayment if a company is liquidated, and the order is as follows: wages to employees, taxes to IRS, secured creditors, debenture creditors, subordinate debenture creditors, preferred stock, and common stock.
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Last updated: 12/15/2017
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