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Definition of 'Bond Purchase Agreement'
A legally binding document between a bond issuer and an underwriter establishing the terms of a bond sale. The terms of a bond purchase agreement will include sale conditions, sale price, bond interest rate, bond maturity, bond redemption provisions, sinking fund provisions and conditions under which the agreement may be canceled. After the issuer delivers the bonds to the underwriter and the underwriter pays the issuer for them, the underwriter will put the bonds on the market at the price and yield established in the bond purchase agreement and investors will purchase the bonds from the underwriter. The underwriter collects the proceeds from this sale and earns a profit based on the difference between the price at which it purchased the bonds and the price at which it sells the bonds.
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Investopedia explains 'Bond Purchase Agreement'
A bond purchase agreement has many conditions. For example, it should require that the issuer not take on any other debt secured by the same assets that will secure the bonds the underwriter is selling, and it should require that the issuer notify the underwriter of any adverse change in the issuer's financial position. The bond purchase agreement also guarantees that the issuer is who it says it is, that it is authorized to issue bonds, that it is not the subject of a lawsuit and that its financial statements are accurate.
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Search results for 'Bond Purchase Agreement'
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http://www.investopedia.com/ask/answers/09/bond-covenant-lease.asp
... Why might a bond agreement limit the amount of assets ... which allows them to circumvent
bond ratio covenants. ... of ownership; there is a bargain purchase option in ...
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http://www.investopedia.com/articles/professionaleducation/07/Series_7_municipal.asp
... a check (which will be credited toward the purchase of bonds ... from the issuer or through
the Bond Buyer. ... as a syndicate letter or an agreement among underwriters ...
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http://www.investopedia.com/exam-guide/series-7/securities-markets/primary-bond-market.asp
... Even if a bond is registered under the Securities ... be offered for sale unless a formal
agreement between the ... set prices and yields, and they purchase bonds from ...
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http://www.investopedia.com/articles/bonds/08/lose-money-bonds-losses.asp
... the former bond stipulated; What the new agreement mandate is. ... For example, you might
buy ABC Company's bond for 96 ... is still a point less than your purchase price ...
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http://www.investopedia.com/exam-guide/series-65/alternative-investments/derivative-securities.asp
... standardized, as they are an agreement between two ... gives shareholders the right to
purchase new shares ... Warrants - Derivatives often attached to bond issues as ...
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http://www.investopedia.com/exam-guide/series-63/foundation/usa-uniform-securities-act-part-5.asp
... stock; treasury stock; security future; bond; debenture; evidence ... in a profit-sharing
agreement; collateral trust ... or right to subscribe to or purchase, any of ...
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http://www.investopedia.com/exam-guide/series-66/regulation-of-securities/exempt-transactions.asp
... Secured transactions - Transactions secured by a note, bond, mortgage or security
agreement, if ... of an issuer if: no more than 25 people purchase the security ...
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http://www.investopedia.com/exam-guide/series-7/customer-accounts/costs-and-fees.asp
... Satisfaction of this agreement results in a lower ... Purchase, Redemption and Service
Fees (custody, wire transfers ... as mezzanine financing (a type of bond with an ...
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http://www.investopedia.com/articles/mutualfund/07/too_many_funds.asp
... get their desired asset allocation through the purchase of a ... a fund in all the stock
and bond categories. ... Despite the lack of agreement among the professionals ...
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http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/capital-operating-leases.asp
... 13.13 Technical Analysis; 13.14 Using Price Multiples. 14. Fixed Income Investments:
14.1 Introduction; 14.2 Bond Features; 14.3 Basic Coupon Structures; ...
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