The indenture between an issuer and a bondholder must be standardized. True or False

The indenture between an issuer and a bondholder must be standardized.

True or False

Expert Solution

Answer - True

Reason - The bond indenture is a legal contract between the issuer and the trustee that specifies the scope and the responsibilities of the borrower, the trustee, and the lender, and the characteristics of the bond, such as the maturity date, coupon rate, and so on. The indenture will specify, among other things, the interest rate, the date of maturity, the procedures to modify the indenture after issuance, and the purpose of the bond issue. The name and contact information of the trustee will be listed in the indenture. If the bond has coupons, the indenture will specify where the coupons can be presented for payment. All this is to serve the needs of the bondholders, including bringing suit in the event of a default.

Therefore, if all the details or responsibilities of issuer present in The Indenture are not standadized then the bondholders can be expoited, Hence The indenture between an issuer and a bondholder must be standardized.

jeff jeffy answered 1 year ago

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