Types of Indenture
- Real Estate Indenture A real estate indenture refers to a deed between two parties wherein the involved parties agree to continue the obligations. ...
- Bankruptcy Indenture A bankruptcy indenture simply refers to the proof of claim on a particular property. ...
- Credit Indenture
What is an indenture agreement in real estate?
An indenture agreement is a legally binding document or contract that establishes terms and conditions between two or more parties. Indenture agreements can govern a real estate transaction, a bankruptcy proceeding, or debt agreements.
What does indenture mean in history?
Indenture. Finally, the concept of indenture has an ignominious place in the history of U.S. labor. Indentured servants of the seventeenth and eighteenth centuries were commonly European workers who contracted to provide labor for a number of years and in return received passage to the American colonies as well as room and board.
What is an indenture on a bond?
Between bond issuers and bondholders, an indenture is a legal and binding contract specifying all the important features of a bond, such as its maturity date, the timing of interest payments, method of interest calculation and callable or convertible features, if applicable.
What is a trust indenture?
A trust indenture is an agreement in a bond contract made between a bond issuer and a trustee that represents the bondholder's interests.
What is the difference between indenture and deed?
In real estate, an indenture is a deed in which two parties agree to continuing obligations. For example, one party may agree to maintain a property and the other may agree to make payments on it.
What is the purpose of an indenture?
An indenture agreement is a legally binding document or contract that establishes terms and conditions between two or more parties. Indenture agreements can govern a real estate transaction, a bankruptcy proceeding, or debt agreements.
Is an indenture the same as a mortgage?
At its simplest, an indenture is an agreement that declares benefits and obligations between two or more parties. In bankruptcy law, for example, it is a mortgage or deed of trust that constitutes a claim against a debtor. The most common usage of indenture appears in the bond market.
What are the examples of indenture?
A contract wherein someone agrees to work for you for two years if you help him come to America is an example of indenture. Indenture is defined as to bind or commit someone to work for you, usually using some type of legal contract.
What is an indenture of mortgage?
Indenture of Mortgage means the registered mortgage deed to be executed by the Issuer for, inter alia, creation of mortgage over the immoveable property of the Issuer and assignment of its rights under the Project Documents in favour of the Security Trustee, in form and substance satisfactory to the Security Trustee.
What is an indenture for land?
Indenture is a deed. Normally, real property transaction involves the sale of real property under contract and is usually consummated by the delivery of an indenture or deed. An indenture is a written instrument used to convey an interest in real property; thus an indenture or deed conveys legal title.
What is an indenture in conveyancing?
Indenture of Conveyance is effectively just an old fashioned alternative name for a conveyance. A Transfer Deed is the document by which the sale of a parcel of registered land is effected. In practice, the transfer deed is a Land Registry pro-forma.
What is the difference between a deed and a mortgage?
The technical difference between the two comes down to who holds an interest in your property. With a deed of trust, a trustee holds the interest. With a mortgage, the bank holds an interest.
Is mortgage deed required to be registered?
Registration of mortgage deed is essential to give legal validity to the document. In case of Mortgage by Delivery of Title Deed, registration is not required. Following are the conditions which need to be fulfilled for a valid registration: The deed must be signed by the Mortgage.
What is sale indenture?
Indenture Of Sale. An indenture is a legal contract that reflects or covers a debt or purchase obligation. It specifically refers to two types of practices: in historical usage, an indentured servant status, and in modern usage, it is an instrument used for commercial debt or real estate transaction.
What details are mentioned in an indenture contract?
It contains all information related to the bond, along with the Rights and responsibility of both issuer and bondholders. Indenture has the legal binding on all the stakeholders, and in case of any dispute or default, the indenture will be considered for any resolution.
What is a bond indenture and what are some of the important features?
What is a Bond Indenture? A bond indenture is the contract associated with a bond. The terms of a bond indenture include a description of the bond features, restrictions placed on the issuer, and the actions that will be triggered if the issuer fails to make timely payments.
What is an indenture in real estate?
Indenture is a term that is subject to different meanings. In the context of real property, it refers to a type of real property deed in which two parties agree to continuing mutual obligations. One party may agree to maintain the property, while the other agrees to make periodic payments. Indenture may also refer to a binding contract obligating ...
What is an indenture agreement?
Also, in a financial context, an indenture is a written agreement that describes the borrowers' responsibility to the lenders in a bond or debenture issue.
What is a trust indenture?
Commerce and Trade; Chapter 2a. Securities and Trust Indentures; Trust Indentures] the term indenture means “any mortgage, deed of trust, trust or other indenture, or similar instrument or agreement (including any supplement or amendment to any of the foregoing), under which securities are outstanding or are to be issued, ...
What is an indenture contract?
An indenture is a legal contract between two parties, particularly for indentured labour or a term of apprenticeship but also for certain land transactions. The term comes from the medieval English "indenture of retainer" — a legal contract written in duplicate on the same sheet, with the copies separated by cutting along a jagged (toothed, hence the term "indenture") line so that the teeth of the two parts could later be refitted to confirm authenticity ( chirograph ). Each party to the deed would then retain a part. When the agreement was made before a court of law a tripartite indenture was made, with the third piece kept at the court. The term is used for any kind of deed executed by more than one party, in contrast to a deed poll which is made by one individual. In the case of bonds, the indenture shows the pledge, promises, representations and covenants of the issuing party.
What is a bond indenture?
Modern usage. Bond indenture (also trust indenture or deed of trust) is a legal document issued to lenders and describes key terms such as the interest rate, maturity date, convertibility, pledge, promises, representations, covenants, and other terms of the bond offering.
Who is the trustee of a trust indenture?
Rather, the trustee in a "trust indenture" is a third party, usually a specialist company, who is appointed by the issuer to handle and safeguard the interests of the numerous public bondholders, in events ranging from the usual distribution of coupons and principal payments to dealing with the issuer's default, if any occurs.
When the agreement was made before a court of law, a tripartite indenture was made?
When the agreement was made before a court of law a tripartite indenture was made, with the third piece kept at the court . The term is used for any kind of deed executed by more than one party, in contrast to a de ed poll which is made by one individual. In the case of bonds, the indenture shows the pledge, promises, ...
Example of Indenture
Now, let us look at some of the examples to illustrate the concept in more detail.
Types of Indenture
Now, let us look at the different types that we may encounter in a typical business setup.
Conclusion
So, it can be seen that indenture is a very important part of any financial transaction. It helps in managing the covenants and the associated legalities of a transaction. It helps in safeguarding the interests of both the lender and the borrower.
Recommended Articles
This is a guide to Indenture. Here we also discuss the definition, examples, and types of Indenture along with advantages and disadvantages. You may also have a look at the following articles to learn more –
What is an indenture agreement?
An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law.
What was the indenture in the colonial period?
In early American history, indenture was a form of labor contract. Beginning during the colonial period, employers in the largely agricultural economy faced a labor shortage. They addressed it in two ways: by buying slaves and by hiring indentured servants.
What were the indentured servants of the seventeenth and eighteenth centuries?
Indentured servants of the seventeenth and eighteenth centuries were commonly European workers who contracted to provide labor for a number of years and in return received passage to the American colonies as well as room and board.
How many slaves were indentured in the seventeenth century?
From the late sixteenth century to the late eighteenth century, approximately half of the 350,000 European immigrants to the colonies were indentured servants. During the seventeenth century, these servants outnumbered slaves.
What is an underwriter in a bond?
The issuer of a bond, in cooperation with an underwriter (i.e., a financial organization that sells the bond to the public ), prepares in advance an indenture outlining the terms of the bond. The issuer and the under-writer negotiate provisions such as the interest rate, the maturity date, and any restrictions on the issuer's actions.
How long did an indentured servant stay in the colonial court?
An indentured servant agreed to a four-to seven-year contract, and in return received passage from Europe and guarantees of work, food, and lodging. Colonial courts enforced the contracts of indentured servants, which were often harsh.
What does "indented" mean in writing?
INDENTURE, conveyancing. An instrument of writing containing a conveyance or contract between two or more persons, usually indented or cut unevenly, or in and out, on the top or, side . 2.
What is an Indenture Agreement?
An indenture agreement is a legally binding document or contract that establishes terms and conditions between two or more parties. Indenture agreements can govern a real estate transaction, a bankruptcy proceeding, or debt agreements.
Common Sections in Indenture Agreements
Below is a list of common sections included in Indenture Agreements. These sections are linked to the below sample agreement for you to explore.
Who Helps With Indenture Agreements?
Lawyers with backgrounds working on indenture agreements work with clients to help. Do you need help with an indenture agreement?
Meet some of our Indenture Agreement Lawyers
I run a small law firm in Pasadena, CA. I have been practicing for almost 10 years and the other attorneys at my firm each have 12+ years of experience. We focus on business and employment law, protecting and defending business owners.
What is a trust indenture?
key takeaways. A trust indenture is legal and binding bond contract made between a bond issuer and a trustee to protect the bondholder's interests. A trust indenture describes the bond's characteristics and the terms of its callability. It also delineates the amount of additional debt the issuer can assume, and the circumstances ...
How does a trust indenture work?
How a Trust Indenture Works. Bonds are issued to lenders or investors to raise money for a corporation or governmental body. To issue a bond, the issuer hires a third-party trustee, usually a bank or trust company, to represent investors who buy the bond. The agreement entered into by the issuer, and the trustee is referred to as ...
What is a special provision in a trust indenture?
Special Provisions of a Trust Indenture. Protective or restrictive covenants are highlighted in a trust indenture. For example, a trust indenture may indicate whether an issued bond is callable. If the issuer can “call” the bond, the indenture will include call protection for the bondholder, which is the period during which ...
Is a trust indenture included in every bond contract?
Trust indentures may not be included in every bond contract, given that. some government bonds disclose similar information (the duties and. rights of the issuer and bondholders) in a document called the bond resolution . Many of the current rules regarding trust indentures were established by the Trust Indenture Act (TIA ), ...
Do you have to file a trust indenture with the SEC?
Corporate issues for less than $5 million, municipal bonds, and bonds issued by the government are not required to file trust indentures with the SEC. Of course, these exempted entities may choose to create a trust indenture to reassure prospective bond buyers, if not to adhere to any federal law.
