2.4 Other Common Document Provisions

Legal documents formalize the structure of a bond, providing the rights and obligations of the involved parties for each financing. Chapter 3, Types of Debt Obligations Issued by Public Agencies identifies the common forms of debt and their associated legal documentation, such as resolutions, indentures, trust agreements, leases, installment sale agreements, and other agreements. These documents provide for the issuance or incurrence and the payment and security of public agency debt (generally referred to as “bond documents,” even if the debt does not take the form of bonds) and are agreements entered into between public agencies and other parties. Even if not a party to the bond documents, investors are the intended beneficiaries of the agreements. The particular bond documents used differ from transaction to transaction, and the contractual terms contained in bond documents also vary considerably, depending upon the type of financing obligation and the debt payment terms. Bond documents generally contain most, if not all, the standard provisions that in addition to term, interest rate, and redemption features define the basic terms of the issue.