Closed-End Indenture
A term in a bond contract that guarantees that the collateral used to back the bond issue cannot be used again to back another bond issue. This is the opposite of an open-end indenture in which more than one bond can be backed by a single collateral. Investopedia Says:
If the bond issuer defaults, a closed-end indenture ensures the bondholders will have the only claims on collateral, making their bonds the most senior security. The fewer claims that exist on the collateral, the more safety a bondholder has.
Related Terms:
Bond
Collateral
Covenant
Indenture
Negative Covenant
Negative Pledge Clause
Open-end Indenture
Senior Security |