bond indenture

  

Definition

Blanket, unconditional contract between the bond issuer and the bond purchaser (bondholder) that specifies the terms of the bond. It states the interest rate (called coupon rate), the dates when the interest will be paid, maturity date(s), and other terms and conditions of the bond issue. Failure to meet the payment requirements calls for drastic penalties including liquidation of the issuer's assets. Also called bond resolution or bond contract. See also deed of trust.

Use bond indenture in a sentence

  • The bond indenture was official and both parties were looking forward to fulfilling their ends of the brand new contract.

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  • The bond indenture ensured a specific type of lending agreement would be experienced between both the buyer and the seller.

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  • You need to understand where your bond indenture stands and be able to quickly make any adjustments if things change.

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