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. Tactical Trading

    A style of investing for the relatively short term based on anticipated ...
RELATED FAQS
  1. What were the objectives of the Glass-Steagall Act?

    The objectives of the Glass-Steagall Act were “to provide for the safer and more effective use of the assets of banks, to ... Read Full Answer >>
  2. How are earmarks and pork barrel spending related?

    Both earmarks and pork barrel spending involve spending money on certain projects or specific events. Projects paid for by ... Read Full Answer >>
  3. What does it mean when a country has little activity in its capital account?

    Since a country's capital account represents money flow into the country through foreign investment, having only a small ... Read Full Answer >>
  4. How accurate is the equity risk premium in evaluating a stock?

    The equity risk premium can provide some guidance to investors in evaluating a stock, but it attempts to forecast the future ... Read Full Answer >>
  5. How do you calculate the geometric mean to assess portfolio performance?

    The geometric mean is used to calculate the central tendency of a set of numbers. It is the average of the logarithmic values ... Read Full Answer >>
  6. What does the operating cash flow ratio measure?

    The operating cash flow ratio measures a company's ability to meet its short-term, or current, liabilities, also known as ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Corporate Bonds: An Introduction To Credit Risk

    Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
  2. Bonds & Fixed Income

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  3. Bonds & Fixed Income

    Retail Notes: A Simpler Alternative To Bond Funds

    These securities are meant to be held until maturity, removing the burden of complex pricing that sometimes plagues bonds.
  4. Options & Futures

    Common Bond-Buying Mistakes

    Avoid these errors made daily in bond portfolios everywhere.
  5. Mutual Funds & ETFs

    Top Tools Every Financial Adviser Needs

    Becoming a financial advisor requires more education and hard work than is often assumed, but today's technology can relieve some of the burden.
  6. Professionals

    How to Be a Better Advisor to Clients, Colleagues

    Do you want to be better advisor to your clients, as well as your own colleagues? Read on.
  7. Professionals

    Why Some Advisors are Shy to Convert Roth IRAs

    Potential upcoming changes from the Obama Administration could hit rollovers from traditional to Roth IRAs, and that has advisors reluctant to convert.
  8. Personal Finance

    Yes, You Can! Tips To Get A New Job In Your 50s

    Competence in your work and loyalty to your tasks are only part of what you need to become highly employable. Cultivate these seven strengths, too.
  9. Taxes

    Missed The Tax Return Deadline? Here's What To Do

    Most important: Do it now.
  10. Professionals

    How to Fund Retirement with Insurance

    So you've contributed the max to all available retirement vehicles...now what? Consider a permanent life insurance policy (and its fee structure).

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center