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What are the types of NCD issues?

There are two types of NCDs (non-convertible debentures): secured and unsecured NCDs.

  1. Secured NCD
  2. As the name suggests, secured NCDs are backed by the company’s assets. They are comparatively safer than unsecured ones because if the issuer company defaults in payments, investors can claim refund through the assets liquidation.

  3. Unsecured NCD
  4. These NCDs are not backed by the company’s assets instead the payment is based on the issuer company’s creditworthiness and cash flows.

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