Unsecured debt has no collateral backing. Lenders issue funds in an unsecured loan based solely on the borrower's creditworthiness and promise to repay. Because secured debt poses less risk to the lender, the interest rates on it are generally lower.
Unsecured bonds, or “debentures,” are not backed by specific assets. Instead, they rely solely on the issuing company's creditworthiness and financial strength.
You may be eligible for an unsecured bond if you committed a minor crime. In addition, a court may be more inclined to offer you the option of an unsecured bond if you have no criminal history. If you accept an unsecured bond, it is in your best interest to comply with its terms.
A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.
(B) a debenture.