UNSECURED DEBENTURE FINANCING

Abstract

After laying out a variety of debenture issues, the author focuses on the restrictions appropriate for more senior types of unsecured debentures, emphasizing the difficulty of striking a balance between sufficient protection for the lender and flexibility for the borrower. Different restrictions appropriate for secured debts, unsecured debts and subsidiaries are discussed and some exemptions from those restrictions are set out. The advantages of a sinking fund in providing for gradual retirement of and helping to maintain a market for the debentures are then explained.