Related Content. A person that manages the relationship between an issuer and holders of the issuer’s securities , usually when those securities have features requiring more administrative involvement than in the case of equity securities such as, for example, debt obligations or warrants.
What is the role of a bond trustee?
A bond trustee is hired by a bond issuer and oversees the implementation of a bond or trust indenture , which is a contract between a bond issuer and a bondholder. The trustee has a fiduciary responsibility to act on behalf of the issuer, rather than in its own interests.
What is a bond indenture What is the function of a trustee?
-The bond indenture is a legal document specifying the rights and obligations of both the issuing firm and the bondholders . ... -A trustee represents the bondholders in al matters concerning the bond issue, including the monitoring of the issuing firm’s activities to assure compliance with the terms of the indenture.
What is a bond 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.
How does a trustee bond work?
A trustee bond protects the interests of the trust beneficiaries in case the trustee does not adequately perform their duties to the beneficiaries. ... Trustee bonds may be required to ensure that the trustee manages and administers the trust according to the terms of the will and law.
Does a trustee have to be bonded?
The trustee is the party that is in charge of administering the trust. The three parties of this bond include the obligee, the principal, and the surety company. The obligee is the court that is requiring the principal to be bonded. The trustee (principal) must be bonded in order to legally act as a trustee .
Is a trustee an agent?
The trustee is not an agent of the beneficiary. ... The beneficiary of a trust is not an agent of the trustee.
What is an owner trustee?
Owner Trustee means the Person acting as Owner Trustee under the Trust Agreement , its successors in interest and any successor owner trustee under the Trust Agreement.
What is included in an indenture agreement?
An indenture agreement is the formal contract between a bond issuer and the bondholders . It sets forth the details of all the terms and conditions of the bonds, such as the exact day of their maturity, the timing of the interest payments and how they are calculated, and the details of any special features.
What is a master indenture?
The master indenture enables members of multiinstitutional health care systems to finance capital programs and expansions by borrowing on the basis of systemwide revenues and assets . ... In contrast, members of an obligated group have direct joint and several liability for master indenture notes.
How is a bond valued?
Bond valuation, in effect, is calculating the present value of a bond’s expected future coupon payments. The theoretical fair value of a bond is calculated by discounting the future value of its coupon payments by an appropriate discount rate .
How does a bond indenture work?
An indenture is a legal contract. A bond indenture is a contract attached with a bond between the issuer and the bondholder. It typically involves a third-party guarantor such as a financial institute or bank that acts as a trustee. A bond indenture specifies the terms and conditions of the bond .
What is the primary purpose of a bond indenture?
Bond Indenture, also known as bond resolution, is is a core legal document that acts as a contract between the bond issuer and bondholder and contains all the details related to the bond, like details of the issue, purpose of issue, obligations of the issuer of bond & rights of bondholders .
How much is a trust bond?
Usually, it must be large enough to cover the full-value of the trust. The cost is then a small percentage of the total value of the surety bond. For example, a $100,000 surety bond may cost around $5,000 to obtain. How much a trustee pays depends on their credit score and financial history.
What is a bond in a trust?
A Trustee Bond is a type of surety court bond . It is the duty of the Trustee to take control over the property and assets, and to administer them according to the terms of the trust. A Trustee Bond guarantees the trustee does this according to the trust and according to the law.
What are bond trustee services?
A trustee’s main functions are to: hold the issuer’s covenant to pay principal and interest (and hold any security if the bond is secured) on trust for the bondholders. monitor the issuer on behalf of the bondholders to make sure the issuer is not in breach of its obligations under the terms and conditions of the bond.
