Trust Indenture

Trust Indenture
An agreement in the bond contract made between a bond issuer and a trustee that represents the bondholder's interests by highlighting the rules and responsibilities that each party must adhere to. It may also indicate where the income stream for the bond is derived from.

Trust indentures may not be included in every bond contract, as some government bonds disclose similar information (the duties and rights of the issuer and bondholders) in a document called the bond resolution.

One section of the trust indenture dictates the circumstances and processes surrounding a default. A bondholder should be aware of these situations because understanding the proper sequence of events will allow them to take the proper course of action if a default occurs.

The section on the trustee's role is important as well, as it gives a clear indication of how unforeseen incidents will be dealt with. For example, if a conflict of interest comes up involving the trustee's role as a fiduciary, in certain trust indentures, the issue must be resolved within 90 days, otherwise a new trustee will be necessary.

Investment dictionary. . 2012.

Look at other dictionaries:

  • trust indenture — n: a document under which a trust (as one created by the issuer of bonds in accordance with the Trust Indenture Act of 1939) is conducted Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. trust indenture …   Law dictionary

  • trust indenture — An instrument which states the terms and conditions of a trust, such as a pension trust or a trust created by way of security for a bond issue …   Ballentine's law dictionary

  • trust indenture — The document which contains the terms and conditions which govern the conduct of the trustee and the rights of the beneficiaries. Commonly used when a corporation floats bonds. See indenture …   Black's law dictionary

  • trust indenture — noun : a document under which a trust (as a mutual investment fund) is conducted …   Useful english dictionary

  • Trust Indenture Act of 1939 — (TIA) USA The Trust Indenture Act of 1939, as amended, supplements the Securities Act in the case of the distribution of debt securities. Generally speaking, the TIA requires the appointment of a suitably independent and qualified trustee to act… …   Law dictionary

  • Trust Indenture Act of 1939 — The United States Trust Indenture Act of 1939 (TIA), codified at usc|15|77aaa through usc|15|77bbbb, supplements the Securities Act of 1933 in the case of the distribution of debt securities. Generally speaking, the TIA requires the appointment… …   Wikipedia

  • Trust Indenture Act of 1939 — A law passed in 1939 that prohibits bond issues valued at over $5 million from being offered for sale without a formal written agreement (an indenture), signed by both the bond issuer and the bondholder, that fully discloses the particulars of… …   Investment dictionary

  • Trust Indenture Act — Federal Act (1939) designed to protect investors in certain types of bonds by requiring that the trust indenture be approved by the SEC and include certain protective clauses and exclude certain exculpatory clauses, and that trustees be… …   Black's law dictionary

  • Trust Indenture Act of 1939 — A law that requires all corporate bonds and other debt securities to be issued subject to indenture agreements and comply with certain indenture provisions approved by the SEC. Bloomberg Financial Dictionary …   Financial and business terms

  • Trust Indenture Act — A federal statute of 1939 having a purpose comparable to that of other federal securities legislation, namely to afford the public protection in connection with securities. 15 USC §§ 77aaa etc …   Ballentine's law dictionary

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