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A trust deed is the
legal agreement detailing the issuer's obligations related to the bond
issue. It contains the terms of the bond issue and any restrictive
provisions placed on the company, such as a requirement for the company to
set up a sinking fund, or the inclusion of a call provision. An independent
trustee administers the trust deed.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
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