Closed-End Indenture

What Does Closed-End Indenture Mean?
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 explains Closed-End Indenture
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
More Related Terms

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