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Trust Indenture Act of 1939 Meaning & Definition

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Definition of Trust Indenture Act of 1939

Trust Indenture Act of 1939 regulates the issuance of corporate debt in excess of $10,000,000 and with a term exceeding one year. It requires an indenture between the issuer and the trustee.

Applying "Trust Indenture Act of 1939" to Securities Exams:

The Trust Indenture Act of 1939 requires a contract between the issuer and the trustee who will act to protect the interests of the bondholders. In the event of default the Trustee will take possession of any collateral that was pledged to back the bond and liquidate it to pay off the bondholders.

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