Debenture Trustee Agreement
The concept of fiduciary bonds was developed because of the difficulties faced by an issuing entity, while bypassing each bond separately, in order to obtain their consent on various issues and to implement compliance when the bonds were issued to several debt holders. To overcome this practical difficulty, there was a need for a one-stop shop that looks after the issuing company and will carry out its duties on behalf of many bondholders, in accordance with the instructions of the bondholders with respect to the provisions of the obligation agreement. “The Company appoints bond trustees in accordance with Section 71 subsection 5 after fulfilling the following conditions, namely: —….. There may be cases where a regulator may appoint an agent for its respective policies or instructions. Some of these cases are mentioned in this section of understanding simplification. “5. No company may file a prospectus or offer or invitation to the public or its members for the underwriting of its obligations, unless the company has appointed one or more agents for obligations prior to that issue or offer, and the terms of appointment of these directors are the terms set.” In its Master Direction on Money Market Instruments: Call / Notice Money Market, Commercial Paper, Certificates of Deposit and Non-Convertible Debentures (initial duration up to one year), the Reserve Bank of India imposes the order of an agent as a loan in cases where companies (including a non-bank financial company) issue bonds of a term of less than or equal to one year. “3. Guaranteed bonds may be issued by a company under the prescribed conditions.” “18. (1) The company may not issue secured bonds unless it meets the following conditions: – The trustee of the bonds is a person who preserves the interests of the bondholders and serves as a link between the issuing company and the bondholders. The bond agreement contains the following information: convertible bonds: there is a vagueness as to the listing of convertible bonds issued by an unlisted company on a private placement basis.
That is why we have not analyzed the need to appoint an agent under that head.