Hi is this statement true : Coporate debentures are not subject to prepayment risk i thought debentures pay interest and mortage payments
It would depend on the covenants
i agree with north. default risk should be more questionable-since they are not secured
Anything that looks like prepayment risk in a corporate bond is called something different, usually call risk. MBS have prepayment risk. Corporate bonds don’t.
If a debenture has no lien on an asset, why would a firm want to pay the debt down? The entire purpose of a corporate debenture is not to impede on future financing. I say there is no prepayment risk on a corporate debenture.
Your credit card balance is a bizzies4 debenture. Are there any reasons you might want to pay down your credit card balance?