Bonds that are usually unsecured and are only backed by worthiness of issuing firm are classified as

Bonds that are usually unsecured and are only backed by worthiness of issuing firm are classified as debentures. Debentures are a debt instrument used by companies and government to issue the loan. The loan is issued to corporates based on their reputation at a fixed rate of interest. Debentures are also known as a bond which serves as an IOU between issuers and purchaser.