2.3 The Bond Indenture Flashcards
1
Q
Bond indenture or trust indenture
A
The legal document that specifies the scope and features of the bond and holds the issue were to its terms
2
Q
To issue a corporate bond and issue or must prepare a formal written document also known as
A
A Bond indenture
3
Q
The indenture must identify?
A
Purpose of the bond issue
Conditions which the bonds may be redeemed before maturity
Promises the issuing company makes
Procedures and remedies
Rights and duties
4
Q
The Trust Indenture Act of 1939
A
Requiring bond in dentures to be registered and qualified by the SEC for each corporate bond issued valued over 5 million
5
Q
Who ensures that the issue were complies with all the covenants specified in the indenture?
A
A third-party trustee the trustee is usually a bank or trust company
