are debentures risky investments 
because debentures are debt securities they tend to be less risky than investing in the same company s common stock or preferred shares debenture holders would also be considered more senior and take priority over those other types of investments in the case of bankruptcy because these debts are not backed by any collateral however they are inherently riskier than secured debts therefore these may carry relatively higher interest rates than otherwise similar bonds from the same issuer that are backed by collateral in fact strictly speaking a u s treasury bond and a u s treasury bill are both debentures they are not secured by collateral yet they are considered risk free securities 