BU393 Chapter Notes - Chapter 21: Private Placement, Syndicated Loan, Life Insurance
Document Summary
The general procedures followed in a public issue of bonds are the same as those for stocks. Week 7: the basic terms of the bond, a description of property used as security, the seniority of the bonds, details of the protective covenants, the sinking fund arrangements, the call provision. Registered bonds in which the issuing company keeps records of the ownership of each registered bond. The company will pay interest and principal by cheque mailed directly to the address of the owner of record. Bearer a bond issued without record of the owner"s name. Protected covenant parts of the indenture or loan agreement that limit certain actions a company takes during the term of the loan to protect the lender"s interest. Negative covenant part of the indenture or loan agreement that limits or prohibits actions that the company may take. Sinking fund an account managed by the bond trustee for the purpose of repaying the bonds.
