"exempt bond indentures
from section 316(b) if they (1) provide for
Being wary of this possible loss in bond values, bondholders often require that a protective covenant be included in the bond indenture
explicitly restricting the sale and lease-back transaction on particular assets of the borrowing firm.
That is, public bondholders do not just break even, but actually gain when the company seeks an amendment to their bond indenture
The presence of ERCs in a bond indenture
, on the other hand, may lead to higher agency costs of equity and hence a lower firm value.
A trustee plan is a simple arrangement for debt liquidation as stated in the bond indenture
. The trustee receives periodic payments from the issuer based upon a fund accumulation schedule, which is usually fixed.
An essential feature of corporate bonds is that omission of a coupon payment precipitates bankruptcy (for a detailed treatment of the standard bond indenture
provisions, see Smith and Warner |22~).
A COC normally triggers an event of default that results in an accelerated payment of loans or their refinancing under a traditional credit agreement (in contrast to a high-yield bond indenture
wherein a COC results in an offer to prepay the bond with premium).
The company's bond indenture
requires provision of financial reports within 60 days of the end of its quarter.
Singer, "Bond Indenture
Provisions and the Risk of Corporate Debt," Journal of Financial Economics (December 1982), pp.
These studies have attempted to refine the research methodology to account for the data limitations inherent in studying bond returns and to account for differences in bond indenture
that could lead to differential bondholder wealth effects.
No further amendments to the contracts are permitted by the bond indenture
without a certification to the trustee that it would not adversely affect payment of debt service.
The bond indenture
requires a coverage ratio of 1.15x.
In conjunction with the sale of the series 2018A bonds and an amendment to the senior lien bond indenture
, the indenture pledged revenues will be expanded to include a new car rental tax equal to 3% of the charge for the rental or lease of any passenger automotive vehicle in the county for a period of one year or less.