Jurisdiction(s):
United Kingdom

Key definition

Bond definition

What does Bond mean? A bond is a tradable debt security used to raise finance: the issuer borrows from investors and agrees to pay interest (a coupon) and to repay principal on a stated maturity date. Bonds may pay fixed, floating or index‑linked coupons, be zero‑coupon, and redeem at maturity or amortise over time. “Bond” is a descriptive market term rather than a single statutory definition, though bonds sit within the wider regulatory category of transferable securities. Documentation typically comprises a prospectus or offering memorandum and terms and conditions, often constituted by a trust deed with a bond trustee acting for bondholders. Key...

Bond trustees’ powers and bondholder consent for amendments and waivers: meetings (quorum, voting, clearing systems), written resolutions and ICMSA standard provisions

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Practice notes

bond trustees’ discretionary powers and bondholders’ consent

This Practice Note outlines the scope of a bond trustee’s discretion, including circumstances where they may alter bond terms or waive breaches without first obtaining bondholder approval. It also explains the rationale for convening bondholder meetings, how such meetings are arranged and conducted, and the various forms of bondholder resolution.

Bond trustees’ discretionary powers

Under the trust deed, bond trustees are vested with a range of discretionary authorities. These include power to amend the bond terms without bondholder consent where, in the trustee’s judgement and subject to specified exceptions, the proposed changes are:

not materially prejudicial to the interests of bondholders
to remedy a manifest or proven error
formal, minor or technical in character

Nevertheless, trustees rarely exercise this power where the amendments are material. For proposals that are substantive or significant, the trustee will usually seek bondholder approval and, as a result, a bondholder meeting may need to be called so that the amendments can be considered and, if thought fit, approved. Bondholder consent can be given...

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Web page updated on 21/05/2026

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