What is the definition of a bond trustee?

A bond trustee is defined as a representative for bondholders. This individual or institution acts on behalf of the bondholders to ensure that the terms of the bond agreement are upheld. The bond trustee is responsible for protecting the interests of the bondholders, which may include monitoring compliance with financial covenants, handling the proceeds from the bond issuance, and managing any necessary negotiations if the issuer faces financial difficulties.

In essence, the role of the bond trustee is integral to maintaining the party's interests involved in the bond issuance process, ensuring that bondholders receive their due payments, and acting as an intermediary between the bondholders and the bond issuer. This fiduciary responsibility underscores the importance of the trustee in creating a sense of confidence among investors regarding the security of their investment in bonds.