8.3 Debentures and Stock

The debenture: the company's debt instrument — the acknowledgment of indebtedness under the instrument's seal (the bond-and-debenture's usage): the holder as CREDITOR (not owner — the share-vs-debenture divide: the return's fixity (the interest vs the dividend), the priority (the debt's precedence), the repayment's term, the voting's absence, the security's charge). The classes: the secured vs unsecured (the charge's presence); the redeemable vs irredeemable (the repayment term); the convertible vs non-convertible (the equity-conversion right — the hybrid); the registered vs bearer (the record's discipline). The issue of debentures: the board's-and-the meeting's authority (the borrowing powers' limits — the debt ceiling's discipline); the prospectus-or-offer- document's route (the public debt issues); the debentures' redemption's sinking-fund discipline. The debenture trustee: the holders' fiduciary — the trustee appointed for the debenture-issue (the trust deed's administration: the security's creation-and-enforcement, the covenants' monitoring, the default's action (the holders' collective protection — the trustee as the dispersed creditors' champion)); the trustee's duties-and-liability (the professional-trustee's discipline — the SEBON regime's faces for the public issues). The stock: the consolidated-equity instrument (the fully-paid shares converted into stock — the stock's divisible-and-transferable units (the historical instrument's note)).