Question

Portland power and light recently issued bonds that offered no collateral except the reputation and established name of the portland power and light company. these represent ________ bonds.

Answer 1

Portland power and light recently issued bonds that offered no collateral except the reputation and established name of the Portland power and light company. These represent debenture bonds.

A debenture is a kind of bond which is unsecured by collateral and usually has a term greater than 10 years. Debentures are backed only by the creditworthiness and reputation of the issuer. Like bonds, debentures may pay periodic interest payments called coupon payments.

The Portland power and light issues bonds which offer no collateral except the reputation and established name of company. Thus, this is a characteristic of debenture bonds.

Hence, debentures are frequently issue by both corporations and governments to raise capital.

To learn more about debentures here:

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