A bond indenture is a legal contract between a bond issuer and a bondholder that lays out the terms and conditions of the bond issue. The indenture sets forth the rights and obligations of the issuer and the bondholders, and contains covenants that protect the interests of the bondholders.
The indenture is signed by the issuer and the bondholders, and is filed with the Securities and Exchange Commission (SEC). The indenture contains important information about the bond issue, including the maturity date, interest rate, coupon rate, and any call provisions.
The indenture is a key document in a bond offering, and bond investors should carefully review the indenture before investing. Why is it called indentured? An indentured bond is a bond in which the bondholder has agreed to accept a lower interest rate in exchange for a higher rate if certain conditions are met. The indenture is the contract between the bond issuer and the bondholder that outlines these terms. Who is the bond issuer? The bond issuer is the party that creates and sells the bond. The issuer is typically a government entity or a corporation. The issuer is responsible for making interest payments to the bondholders and for repaying the principal amount of the bond at maturity. What is the difference between debenture and indenture? A debenture is a type of debt instrument that is not secured by collateral. An indenture is a legal document that establishes the terms of a debt instrument. What is the opposite of indenture? The opposite of indenture is mortgage. Is an indenture a contract? An indenture is a contract between a borrower and a lender that sets forth the terms of a loan. The indenture includes information such as the interest rate, repayment schedule, and any covenants.