What is the purpose of a debenture Trust Deed?
A debenture trust deed is a debt instrument that is accompanied by a contract for repayment from the company issuing the debt. The company receives cash to fund its capital expenditures, and the investor receives guaranteed interest and principal payments.
What is debenture Trust Deed in company law?
(b) The agreement created by the company, whereby trustees are appointed to protect the interest of debenture-holders before they are offered for public subscription is known as Debenture Trust Deed. (d) It is a legal instrument conveying the assets of a company to the Trustees.
Is debenture trust deed required to be registered?
The SEBI (Debenture Trustees) regulations,1993 are applicable on all listed companies. According to this regulation, the debenture trustees should be registered with SEBI and obtaining a registration certificate in accordance of SEBI provisions.
Who can become debenture trustee?
3. Who can be appointed a Debenture Trustee? To act as debenture trustee, the entity should either be a scheduled bank carrying on commercial activity, a public financial institution, an insurance company, or a body corporate. The entity should be registered with SEBI to act as a debenture trustee.
Who can act as debenture trustee?
Can NBFC be a debenture trustee?
Since NBFCs are not specifically excluded from the purview of SEBI, they will continue to be regulated by RBI and SEBI. 12 of SEBI Act, read with regulations pertaining to debenture trustees.
What are debentures in India?
Debenture is document issued under the seal of the company. Debenture is an acknowledgment of the funds received by the company equal to the nominal value of the debenture. It includes the payment of interest at a fixed rate till the times the principal sum becomes repayable.
What does a debenture trust deed do for a company?
What are the duties of a trust deed?
The trustee’s duties include requesting periodic reports from the company and enforcing the security interests of debenture holders according to the trust deed’s provisions.
What are the particulars of the appointment of debenture trustee?
PARTICULARS OF THE APPOINTMENT OF DEBENTURE TRUSTEE(S): (a) The conditions and procedure for the appointment of the debenture trustee; (b) Procedure for resignation by trustee including appointment of new trustees; (c) Provision that the debenture trustee shall not relinquish his office until another debenture trustee has been appointed;
What are the requirements for a debenture contract?
Pile of paper-clipped paperwork. The contract must specify the interest rate and dates of interest and principal payments. Some debenture contracts also include requirements for the issuing company, such as minimum liquidity ratios and profit margins, acceptable levels of financial risk and disclosure of the company’s credit rating.
