Classes of debentures according to the security (art. 326 LGS)
Article 326 of the General Companies Law distinguishes debentures with floating, common or special security, and allows them to be convertible into shares and issued in foreign currency.
What article 326
Article 326 sets out the classes of debentures according to their security.
Debentures shall be with floating security, with common security, or with special security. An issue whose privilege is not limited to specific real estate shall be deemed made with floating security. They may be convertible into shares, in accordance with the issue program, and issued in foreign currency.
Source: Law 19,550, art. 326 — InfoLEG (updated official text)
Commentary
The security defines the debenture holder's backing: floating (over the entire assets), special (over specific assets, such as a mortgage) or common (without privilege, like an unsecured creditor). Convertibility allows the debt to be transformed into an equity stake.
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