Indentures of trust are agreements made between issuers and bondholders and the trustees. Often included within the bond contracts, they discuss the rules and responsibilities of each party, as well as from where the bond’s income stream is derived.
For example, indentures of trust may contain clauses that dictate what happens when the issuer of the bond defaults, particularly in the event of unforeseen incidents. Bondholders and issuers can then reference these agreements in order to determine the remedy.