Indenture Hide Value Choice For Free

At its simplest, an indenture is an agreement that declares benefits and obligations between two or more parties.In bankruptcy law, for example, it is a mortgage or deed of trust that constitutes a claim against a debtor. The most common usage of indenture appears in the bond market.

An indenture agreement is the formal contract between a bond issuer and the bondholders. It sets forth the details of all the terms and conditions of the bonds, such as the exact day of their maturity, the timing of the interest payments and how they are calculated, and the details of any special features.

A bond indenture is the stipulation that subsequent creditors agree to wait until all claims of the senior debt are satisfied. a restrictive provision often included in a bond indenture, providing for the systematic retirement of bonds prior to their maturity.

As nouns the difference between indenture and deed is that indenture is (legal) a contract which binds a person to work for another, under specified conditions, for a specified time (often as an apprentice) while deed is an action or act; something that is done.

1) Generally, any written agreement between two parties. 2) A real estate deed in which two parties agree to continuing obligations; for example, one party may agree to maintain the property and the other to make periodic payments.

Protective covenants usually provide at least the following provisions:pay the interest and principal of its bonds.specify when bonds can be presented for payment.maintain the collateral in good condition.insure the collateral against loss.defend the legal title to the property.More items...

Why Does a Restrictive Covenant Matter? Lenders attach restrictive covenants to bond issues and loans as a way to force the borrower to operate in a financially prudent manner that most ensures it will repay the debt.