When a company issues new debentures with a lsquo pari passu rsquo clause it means that ........

Companies Act( Revenue Account ) Share capital and debentures

When a company issues new debentures with a ‘pari passu’ clause, it means that:

there is no difference between the new and existing debentures as regards security and in the event of bankruptcy, both will be discharged proportionately

the holders of existing debentures will have prior claim in the event of bankruptcy

the new debentures will have a lower coupon than the existing debentures

the new debentures will be unsecured even if the existing debentures are secured

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Explanation:

there is no difference between the new and existing debentures as regards security and in the event of bankruptcy, both will be discharged proportionately