It stands for secured non-convertible debenture; a non-convertible debenture (NCD) that is backed by the company’s assets and involves a floating or fixed charge imposed on the underlying assets of the company as a means to support payment. A secured NCD is backed by specific assets like land, buildings or machinery. This is opposed to an unsecured NCD that is backed only by the cash flows of the issuing company. Given the risk involved, a company is expected to pay a higher rate for an unsecured NCD than a secured NCD.

The fixed charge is set up against such assets that are possessed by the company for the purpose of  deployment in its activities and that are not held for sale whereas floating charge relates to all assets excluding those accredited to the secured creditors. In other words, the fixed charge is placed on a particular asset whereas the floating charge is imposed on the overall assets of the company.