Restrictive covenants are designed to protect both the bondholder and the issuer even though they might constrain the actions of the firm's managers. Such covenants are contained in the bond's indenture.

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Restrictive covenants are indeed designed to protect both the bondholder and the issuer, as they ensure that certain actions or decisions by the company do not negatively impact either party. These covenants are typically included in the bond's indenture and can help to mitigate risk or uncertainty for investors. While they may limit some of the flexibility or autonomy of a company's managers, they ultimately help to maintain the stability and reliability of the bond's terms and conditions.

Restrictive Covenants Are Designed to Protect Both the Bondholder and the Issuer