FI 311 Chapter Notes - Chapter 6-7: Sinking Fund, Balloon Payment Mortgage, Corporate Bond
Document Summary
Short term: <=1 year, unfunded debt. Long term: >1 year, public issue, privately placed. Directly placed with a lender and not offered to the public: types of long term debt: Indenture: written agreement between the corporation (the borrower) and its creditors, deed of trust, the trust company must, make sure the terms of the indenture are obeyed, manage the sinking fund, represent the bondholders in default. A description of property used as security. Details of the protective covenants: ex: Interest is payable semiannually on july 1 and january 1 of each year to the person in whose name the bond is registered at the close of business on june 15 or december 15, respectively. Terms of a bond: corporate bonds are in registered form. The form of bond issue in which the registrar of the company records ownership of each bond. Payment is made directly to the owner of record: bearer form.
