5.2.2. Bond Indenture
The bond indenture, also called the trust indenture, is the legal document that specifies the scope and features of the revenue bond and holds the issuer to its terms.
The issuer must appoint an independent trustee to protect the bondholders’ rights as stated in the indenture. This third-party trustee, usually a bank or trust company, is responsible for authenticating the bonds and assuring that the issuer complies with all of the covenants specified in the indenture. Specifically, the indenture must identify:
• Purpose of the bond issue and its features
• Conditions under which the bonds may be redeemed before maturity
• Covenants, or promises, that the issuing company makes with respect to its behavioral obligations over the life of the bond
• Flow of funds,