A debenture that does not carry a fixed maturity date. It virtually continues indefinitely as the issuer has no obligation to repurchase it from its holders. The holders receive periodic interest payments (as a perpetual income stream) while the principal remains invested. Repayment of the principal is not subject to a specific redemption date.

A perpetual debenture is a hybrid security because it has characteristics of both debt and equity securities. It does not have a stated maturity and, Instead, it has the so-called economic maturity. An economic maturity is a date at which a perpetual debenture is expected to be redeemed by the issuer. Nevertheless, the issuer is not under any obligation to redeem it by repaying its principal amount.

Investors still have expectations that a perpetual debenture will be redeemed at some time in the future (at an undefined redemption date). In practice, perpetual debentures have a provision stipulating that the effective cost of the security will be increased if it is not redeemed at a certain redemption date (usually known as first redemption date).

It is also known as an irredeemable debenture or a perp.