indentureship

indenture

A legal contract between a bond issuer and its lenders that specifies the terms of the issue. Typical provisions are the amount and dates of interest payments, name of the trustee, maturity date, collateral, restrictions on dividends or other borrowing, and specifics of a sinking fund or potential calls. It is the trustee's job to ensure that the terms of the indenture are fulfilled. Also called bond indenture, trust deed. See also covenant.

Main Entry: in·den·ture
Pronunciation: in-'den-ch&r
Function: noun
Etymology: Old French endenture an indented document, from endenter to indent (divide a document into sections with irregular edges that can be matched for authentication), from en- thoroughly + dent tooth
1 : a document stating the terms under which a security (as a debenture or other bond) is issued; specifically in bankruptcy law : a document (as a mortgage or deed of trust) under which there is outstanding security constituting a claim against a debtor, a claim secured by a lien on any of the debtor's property, or an equity security of the debtor
2 : a deed or other document to which two or more parties (as both grantor and grantee) are bound