Explanation:

- Option 1: Nominal value of debentures

Debentures issued as collateral security do not generate interest on their nominal value because they are not used as a loan source themselves.

- Option 2: No interest is paid

When debentures are issued as collateral security, they do not actually change hands. They are simply pledged as a security, and hence no interest payment is made on them.

- Option 3: Face value of debentures

Similar to the nominal value, interest is not paid on face value, as the debentures are not being used to raise funds, just to provide security.

- Option 4: Paid up value of debentures

As with other values, no interest is paid because these debentures are collateral, not a direct financial transaction.