What is the purpose of an indenture?
An indenture is a legal and binding contract usually associated with bond agreements, real estate, or bankruptcy. An indenture provides detailed information on terms, clauses, and covenants. There can be a few different types of indentures and many different types of indenture clauses.
What does a trust indenture do?
The trust indenture specifies the terms and conditions of the debt obligations or warrants, including interest rate, maturity, redemption and timing and methods of payment in the case of debt obligations and procedure for exercise, exercise price and expiry date in the case of warrants.
What is the difference between an indenture and a credit agreement?
A credit agreement usually carries a term of five years or less; an indentures term is usually seven to ten years. A credit agreement can be, and often is, amended with some regularity; an indenture can only be amended by consent solicitation, which is costly and time consuming.
Why is it called an indenture?
The term comes from the medieval English indenture of retainera legal contract written in duplicate on the same sheet, with the copies separated by cutting along a jagged (toothed, hence the term indenture) line so that the teeth of the two parts could later be refitted to confirm authenticity (chirograph).
What is an example of a bond indenture?
Bond Indenture Example Example of Bond Indenture: There is a company XYZ that needs capital to expand its business; for that, he sought advice from his financial advisor. The companys Financial Advisor suggested raising funds from those seeking to invest their money in such a business.
Who are the parties to an indenture?
Thus, we can say there are three persons involved in the bond indenture, namely the issuer, the bondholder, and the fiscal agent/trustee.
What type of document is the indenture agreement?
An indenture agreement is a legally binding document or contract that establishes terms and conditions between two or more parties. Indenture agreements can govern a real estate transaction, a bankruptcy proceeding, or debt agreements.
What is a indenture in legal terms?
An indenture is a particular formal contract or deed made between two or more parties. Beginning in medieval England, an indenture can be defined as a specific agreement within a contract noted with a specific duration or significance.
What is the purpose of an indenture?
An indenture is a legal and binding contract usually associated with bond agreements, real estate, or bankruptcy. An indenture provides detailed information on terms, clauses, and covenants. There can be a few different types of indentures and many different types of indenture clauses.
What type of document is the indenture agreement?
An indenture agreement is a legally binding document or contract that establishes terms and conditions between two or more parties. Indenture agreements can govern a real estate transaction, a bankruptcy proceeding, or debt agreements.
