Open-End Indenture

Open-End Indenture

A clause in a revenue-bond agreement that permits the issuance of additional revenue bonds in the future, provided that the revenue of the previous year was sufficient enough to cover the costs of the new issue.

This type of restriction in a bond agreement mainly serves to provide flexibility for the bond issuer, allowing it to alter its financing mix. However, by stipulating that previous revenue levels must cover any new issues of bonds, bondholders are assured a measure of safety.

Investment dictionary. . 2012.

Look at other dictionaries:

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  • open-end — adjective Date: 1917 organized to allow for contingencies: as a. permitting additional debt to be incurred under the original indenture subject to specified conditions < an open end mortgage > b. having a fluctuating capitalization of shares that …   New Collegiate Dictionary

  • Closed-End Indenture — A term in a bond contract that guarantees that the collateral used to back the bond issue cannot be used again to back another bond issue. This is the opposite of an open end indenture in which more than one bond can be backed by a single… …   Investment dictionary

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  • closed mortgage — noun : a mortgage under which no or virtually no additional bonds can be sold under the indenture contrasted with open end mortgage …   Useful english dictionary

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