The Bond Trustee, generally a trust company or a trust division of a bank, enforces the bond contract with the issuer. The trustee acts on behalf of the bondholders in a fiduciary capacity, rather than the issuer, ensuring compliance with bond covenants and overseeing operation within approved budgets.
When principal and interest payments are due, the issuer sends the money to the bond trustee. In practice, the trustee may serve in multiple capacities for the issuer, including as the registrar that maintains the list of bondholders and the paying agent that makes payments to investors.