Question 22 of 27
Q.What particulars are included in the Debenture Trust Deed?
Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2025Subjective· 3mImportance★★★★★
81% · 22/27 Questions
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Start your 14-day free trial to unlock the full solution →The debenture trust deed records the parties, the issue details, the security/charge, interest and redemption terms, the powers and duties of the trustees, and the rights/remedies of holders on default.
The debenture trust deed is the formal agreement executed between the company and the debenture trustees (who act on behalf of the debenture holders). It typically contains the following particulars:
- Names of parties — the company and the trustees, and terms of the trustees' appointment and remuneration.
- Amount and description of debentures — total amount raised, number of debentures, nominal (face) value, and class/type.
- Rate of interest — the coupon rate and the dates on which interest is payable.
- Security / charge — the nature (fixed or floating) and details of the charge created on the company's assets to secure repayment.
- Redemption terms — the manner, period and dates of redemption/repayment of principal, and any sinking-fund or DRR arrangement.
- Powers and duties of trustees — their authority to hold the security, monitor the company, and act to protect holders.
- Rights and remedies of debenture holders — including what happens, and what steps the trustees may take (such as selling the charged assets), if the company defaults on interest or repayment. …
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