Bond Trustee

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Bond Trustee

An organization, almost always a financial institution, hired by a bond issuer to ensure the terms of the indenture and all applicable laws are being followed. The trustee has a fiduciary responsibility to act on behalf of the issuer, rather than in its own interests.
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During the majority of my time at the agency, I ran the securities trading operation--a department somewhat analogous to the bond trustees covering nonconforming space.
Other attributes can help users compare the data supplied by the bond trustee or mortgage issuer with data supplied to the credit-rating agency that provide insight to possible fraud at mortgage origination.
Antonoff adds that the group will work with investment banks, bondholders, bond trustees and other members of the financial community involved in warehouse loans, whole loan sales, repurchase and securitization issues as well as mortgage lending clients that may be facing bankruptcy, regulatory scrutiny, mortgage fraud claims and other litigation.
Many investors feel they are being misled about the true financial status of companies that issue debt, and that corporate bond trustees and banks are not protecting their interests.
(89) The core of the Bond Committee consisted of eight major banks (The Industrial Bank of Japan, Mitsui Bank, Mitsubishi Bank, Fuji Bank, Sumitomo Bank, Sanwa Bank, and DKB (then Dai-Ichi Bank and the Japan Kangyo Bank)) that enforced a monopoly under which only banks on the committee were permitted, under the committee's own rules, to serve as bond trustees (shasai boshu no jyutaku gaisha or jutaku ginko).
In the 1960s the very same banks that were the bond trustees, that set the issuance conditions and chose which companies could issue bonds through the Bond Committee, purchased, on average, 63.4% of bonds issued, and sometimes as much as 80% depending on the issue.
Despite relaxation of issuance standards, the Japanese unsecured straight bond market failed to develop because of the dominant position held by Japan's banks that served as corporate bond trustees (jyutaku ginko) under the Secured Corporate Bond Trustee Law.
Mycal's unexpected bankruptcy has raised serious doubts about whether corporate bond trustees are taking their duties as protectors of investor assets seriously.
As previously explained, in Japan bond trustees are usually the bond issuers' main banks.
items to be reviewed include feasibility studies; opinions of bond counsel; offering statements; development and management agreements; underwriters' agreements; issuing authority documents; how the bonds were marketed; reasonableness of fees paid; relationship of bond trustees; and the bond closing book.
If the company fails to comply with the covenants, the bond trustees could take steps to enforce the covenants and accelerate the payment of the bonds.
Bond indentures also may provide for significant assets to be pledged to the bond trustee, thereby inhibiting the ability of the acquirer to sell those assets.