Commentary

49 Issue of debentures at a discount

COMPANIES vol 10(2) borrowing and debentures
| Commentary

49 Issue of debentures at a discount

| Commentary

49 Issue of debentures at a discount

All debentures of a series need not be issued at the same time. The contract to take debentures is governed by the same principles as a contract to take shares, with one important exception. A company may issue debentures at a discount, whereas it has a strictly limited power of issuing shares at a discount1.

A company must borrow on the best terms it can get and, if its credit or security is not good enough to enable it to borrow at par or at a premium, it must either issue debentures or debenture

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