How NCDs are different from Bonds ?
Both NCDs (or Bonds) are fixed income instruments. There are some differences between NCDs and Bonds, however.
- Public companies issue NCDs, while large companies and financial institutions can issue bonds to raise capital.
- Bonds are usually secured while NCDs may be secured or unsecured.
- Priority to repay the debt at liquidation is given to the bondholders first and then to the debenture owners second.