A bond indenture is
A)a bond that is secured by specific assets of the issuing corporation.
B)the agreement between the issuing corporation and the bondholders.
C)a bond that is unsecured.
D)a bond that has past due interest payments.

Question

Quizplus · Accepted Answer

A bond indenture is the legal agreement between the issuing corporation and the bondholders, which sets out the terms and conditions of the bond issuance, including the interest rate, maturity date, and any special provisions or covenants. It is essentially a contract that outlines the rights and responsibilities of both parties, and serves as a form of protection for bondholders. Option A refers to a secured bond, which is a separate concept from the indenture itself. Option C refers to an unsecured bond, which may still have an indenture agreement. Option D refers to a bond that has defaulted on interest payments, which is not relevant to the definition of a bond indenture.

A Bond Indenture Is