Bond indenture

A bond indenture is the written agreement between bond issuer and bondholder. Generally an issuer hires a trustee (e.g. bank) to help protect the rights and interests of bondholder

The duties of trustee are:
  • Terms of indenture are obeyed by both parities 
  • Representation the bondholder in default 
  • Management of sinking fund 

Generally the bond indenture includes:
  • The call provisions 
  • The basic terms of bond issuance 
  • The amount of bonds have been issued 
  • A description of the bond or security 
  • Arrangements of the repayment 
  • Description of the protective covenants