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Non Convertible Debentures
A non convertible debenture is simply a debt instrument used by a company when it wishes to raise money from the public. The company issues a debt paper for a specific tenor. During this period, it pays a fixed rate of interest to the buyer. This could be on a monthly, quarterly or annual basis.
The debentures which can't be converted into shares or equities are called non-convertible debentures (or NCDs). Description: Non-convertible debentures are used as tools to raise long-term funds by companies through a public issue.
There are two types of non-convertible debentures: Secured NCDs: Secured NCDs are those NCDs that are backed by the issuer company's assets. Unsecured NCDs: When the NCDs are based only on the creditworthiness of the issuer and not backed by assets, they are called unsecured NCDs.