As part of the process of buying and selling bonds, the bond indenture provides the means of articulating the terms and conditions for the transaction. The specifications within the bond indenture define both the responsibilities and commitments of the seller as well as those of the buyer.

Much of the information that is contained in the bond indenture has to do with the description and sales information that is related to the bond. The issuer of a bond will use the indenture to describe the form of the bond, providing a description that will include enough detail about the issuer and the bond trustee for interested investors to research the background of the bond issue. Within the text of the bond indenture, there are also specifics about the repayment schedule that will be managed by the bond trustee. This is to ensure that the bondholder is clear on when to expect interest payments, as well as whom to contact in the event of questions or concerns.

Other important data supplied within the text of the bond indenture includes the maturity date on the bond, any call provisions or protective covenants that are extended according to the terms of the agreement, and interest rate that is to be paid to the bondholder. In the event that any type of collateral is involved in the sale of the bond, the bond indenture will make note of the assets that are pledged, and what type of circumstance would have to occur in order for the collateral to change ownership.

As a document that is designed to ensure that both the bond issuer and the buyer and seller have a clear understanding of the terms of the transaction, the bond indenture generally employs a relatively easy to read format. While the actual text will include legal terms that are required by the laws of the jurisdiction where the sale is taking place, the bond indenture tends to follow a logical pattern in identifying the terms. This makes the text of the bond indenture accessible to everyone, especially new investors who may not be completely comfortable with documents that contain a great deal of financial terminology.