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The trustee is the
third party with whom the trust deed is made. The job of the trustee is to
see that the terms and conditions of the trust deed are carried out. As the
trust deed also contains provisions in the event of default, the trustee
would undertake action to protect the interests of the bondholders in the
event of a default.
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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