Do you know the rights of bondholders? pls i nid it badly?
Answer:
The rights of bondholders vary with the types of bonds that they hold. Most bondholders have only the right to receive payment of interest and principal. The bondholders get paid before holders of stock in the event of the liquidation of the company. The rights of bondholders are often governed by an indenture which sets forth their rights. These rights may include debt coverage ratios and negative control rights, to name a few. In those situations, the bondholders may have the right to appoint a board member, block certain transactions or have other rights in the event that the corporation does not meet certain guidelines set forth in the indenture.
With municipal bonds, there are two types: revenue and general obligation. Revenue bonds give the bondholders the rights to the revenue of a specific project (say a football stadium) and do not give them the rights to the taxing authority of the municipality. General obligation bonds give the bondholders the right to rely on the taxing authority of the municipality for repayment.
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