Business Glossary

legal document that specifically states the conditions under which a bond has been issued, the rights of the bondholders, and the duties of the issuing corporation; also called bond indenture ; deed of trust. An indenture normally contains a number of standard and restrictive provisions ( covenant ), including a sinking fund requirement, a minimum debt-equity ratio to be maintained, and an identification of the collateral if the bond is secured. It also covers redemption rights and call provisions. The indenture provides for the appointment of a trustee to act on behalf of bondholders.

formal agreement, also called a deed of trust, between an issuer of bonds and the bondholder covering such considerations as: (1) form of the bond; (2) amount of the issue; (3) property pledged (if not a debenture issue); (4) protective covenant including any provision for a sinking fund; (5) working capital and current ratio ; and (6) redemption rights or call privileges. The indenture also provides for the appointment of a trustee to act on behalf of the bondholders, in accordance with the trust indenture act of 1939 .

1. written agreement specifying the terms and conditions for issuing bonds, stating the form of the bond being offered for sale, interest to be paid, the maturity date, call provisions and protective covenants, if any, collateral pledged, the repayment schedule, and other terms. It describes the legal obligations of a bond issuer and the powers of the bond trustee , who has the responsibility, under the trust indenture act of 1939 , for ensuring that interest payments are made to registered bondholders.
2. mortgage or deed of trust securing a lien against real property, specifying covenants and conditions, as agreed by the seller (the grantor) and the buyer.

formal agreement, also called deed of trust, between an issuer of bonds and the bondholder, covering such considerations as: (1) form of bond; (2) amount of issue; (3) property pledged (if not a debenture issue); (4) protective covenants including any provision for a sinking fund; ( 5) working capital and ratio; and (6) redemption rights or call privileges.

a written agreement made between 2 or more persons having different interests.

Example: The indenture trustee enforces the agreement made between the bond issuer (borrower) and the lender.