Unsecured notes

Cards (2)

  • Overall
    the same as debentures, but they aren’t secured against an asset
    Borrowing money from the public (investors) with the promise of paying it back by a specific date WITH interest
    Companies sell unsecured notes to generate money for their initiatives such as share purchase and acquisitions
    Investor is only relying on the creditworthiness and good reputation of the issuer
  • + and -
    + not secured against an asset
    -Aren’t as safe for investors
    -interest rates are against higher for the business