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Simple English definitions for legal terms
corporate indenture
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A quick definition of corporate indenture:
Corporate indenture: A legal document that outlines the terms and conditions of a bond issued by a corporation. It is a type of contract that binds the corporation to repay the bondholders according to the agreed-upon terms. Think of it like a promise that the corporation makes to the people who invest in their bonds. The indenture includes important details such as the interest rate, maturity date, and any collateral that secures the bond.
A more thorough explanation:
A corporate indenture is a legal document that outlines the terms and conditions of a bond or loan issued by a corporation. It is a contract between the corporation and the bondholders or lenders, and it specifies the interest rate, maturity date, and other important details of the debt.
For example, if a company wants to raise money by issuing bonds, it will create a corporate indenture that outlines the terms of the bond offering. The indenture will specify the interest rate that the company will pay to bondholders, the maturity date of the bonds, and any other conditions that must be met in order for the company to repay the debt.
Another example of a corporate indenture is a loan agreement between a corporation and a bank. The indenture will outline the terms of the loan, including the interest rate, repayment schedule, and any collateral that the corporation must provide to secure the loan.
These examples illustrate how a corporate indenture is a legally binding agreement that sets out the terms and conditions of a debt issued by a corporation. It is an important document that protects the rights of both the corporation and the bondholders or lenders.