Unsecured Note

AAA

DEFINITION of 'Unsecured Note'

A loan that is not secured by the issuer's assets. Unsecured notes are similar to debentures but offer a higher rate of return with less security than a debenture.Such notes are also often uninsured and subordinated. The note is structured for a fixed period of time.

INVESTOPEDIA EXPLAINS 'Unsecured Note'

Companies sell unsecured notes through private offerings to generate money for corporate initiatives such as share repurchases and acquisitions. An unsecured note is not backed by any collateral and therefore presents the most risk to lenders (investors in the notes). Due to the higher risk involved, the interest rates on these notes are higher than with secured notes.

RELATED TERMS
  1. Retail Note

    A medium-term, subordinated, unsecured debt obligation usually ...
  2. Unsecured Debt

    A loan not backed by an underlying asset. Unsecured debt includes ...
  3. Exchange Traded Notes - ETN

    A type of unsecured, unsubordinated debt security that was first ...
  4. Public Income Notes - PINES

    An unsecured, unsubordinated debenture issued by a public company. ...
  5. Secured Note

    A type of loan that is backed by the borrower's assets. If a ...
  6. Merchandising

    Merchandising is any act of promoting goods or services for retail ...
Related Articles
  1. Corporate Bonds: An Introduction To ...
    Bonds & Fixed Income

    Corporate Bonds: An Introduction To ...

  2. Find The Right Bond At The Right Time
    Bonds & Fixed Income

    Find The Right Bond At The Right Time

  3. Retail Notes: A Simpler Alternative ...
    Bonds & Fixed Income

    Retail Notes: A Simpler Alternative ...

  4. Common Bond-Buying Mistakes
    Options & Futures

    Common Bond-Buying Mistakes

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center