Periods exceeding 5 years are usually regarded as long-terms. Long-term investment property mortgages financing is required for procuring fixed assets, for the establishment of new business or for substantial expansion of existing business.

Corporate securities are instruments by which capital is raised by joint stock companies. There are two classes of corporate securities: ownership securities and creditor securities. Ownership securities are the shares by which the owned capital, also known as venture capital, and risk capital is raised. The investment property mortgages shares of a company may be broadly divided into Preference shares and Equity shares.

Preference shares are those which have preferential rights to the payment of dividends during the lifetime of the company, and a preferential right to the return of capital when the company is wound up. All shares that are not preference shares are equity shares, also called ordinary shares. Unlike the preference share, investment property mortgages shares do not have a fixed rate of dividend.

Creditor securities, which consist of debentures and bonds, are credit instruments that are widely used by companies to raise funds. The capital raised through creditor securities is known as debt capital. The term debenture is defined as “a document under the company’s seal which provides for the payment of a principal sum and interest thereon at regular intervals, which is usually secured by a fixed or floating charge on the company’s investment property mortgages or undertaking which acknowledges a loan to the company.”

From the point of view of security, debentures are classified into investment property mortgages and simple or naked debentures. Mortgage debentures, also called secured debentures, are those which are secured by a charge on the assets or property of the company, whereas simple investment property mortgages debentures are those that are not secured by any charge on the assets of the company.

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