Which among the following debentures are the debentures which can be transferred by way of delivery and the company does not keep any record of the debentures. Interest on the debentures is paid to a person who produces the interest coupon attached to such debentures?

Bearer Debentures

The correct answer is option 3- Bearer Debentures.

Bearer Debentures are the debentures which can be transferred by way of delivery and the company does not keep any record of the debentures. Interest on the debentures is paid to a person who produces the interest coupon attached to such debentures.

Bearer debentures are not registered in the name of the holder and are payable to the bearer of the instrument. They are transferable by mere delivery, meaning ownership can be transferred simply by physically handing over the debenture certificate to another party, without the need for any formal registration or endorsement.

OTHER OPTIONS

• Reedemable Debentures: It refers to the repayment of debentures by the company to the debenture holders. In this process, debenture holders get payment for the debentures they were issued, and the repayment is made as per terms and conditions determined at the time of debenture issue. It may be redeemable at par, discount or premium.

• Secured debentures refer to those debentures where a charge is created on the assets of the company for the purpose of payment in case of default. The charge may be fixed or floating. A fixed charge is created on a specific asset whereas a floating charge is  on the general assets of the company. The fixed charge is created against those assets which are held by a company for use in operations not meant for sale whereas floating charge involves all assets excluding those assigned to the secured creditors.

• Specific Coupon Rate Debentures are issued with a predetermined interest rate, known as the coupon rate. This rate can be fixed or floating, with floating rates often tied to the bank rate.