what information is contained in a bond indenture?
2007-12-06 01:23:12 · 2 answers · asked by ameri0903 3 in Business & Finance ➔ Investing
Interest rate, convertibility, and maturity date
- Taken straight from investorwords.com
2007-12-06 01:27:03 · answer #1 · answered by benvanzile 4 · 1⤊ 1⤋
It does not contain the interest rate -- this fluctuates with time. It does include the coupon rate.
The indenture contains all of the terms of the contract between the issuer and the parties lending them money. It includes the terms of the bond (coupon rate, frequency of payment, maturity date). It also includes any information about embedded options (Call features, put features, conversion information if it is a convertible bond). If it is a floating rate bond, it contains information on the index value used and the spread over that rate..
It also includes information on what constitutes technical default -- and the rights of the bondholders in case of default. Failure to pay may constitute default -- but some bonds have provisions that the company must maintain certain accounting ratios, may not issue senior debt without the permission of the bondholders or must pay back the money borrowed if certain assets are sold.
The indenture is somethies referred to as the Bond Covenant
2007-12-06 02:51:54 · answer #2 · answered by Ranto 7 · 0⤊ 0⤋