A corporate bond is a financial instrument that a corporation issues and sells to investors. The bond is often backed by the company’s payment ability, which is typically money to be generated through future activities. In rare circumstances, the actual assets of the firm may be used as security for bonds.

It is a statutory requirement that a Trustee must be appointed in debt issuances regulated by the Securities Exchange Commission (SEC). There are however other debt issuances that are issued via private placement and do not necessarily require SEC approval.

The importance of the Trustee’s role cannot be overstated. This is due to the Trustee’s primary responsibility for repaying investors’ interest and principal payments. The Trustee also makes certain that the Issuer fulfils all of its duties under the Trust Deed. In general, the Trustee is in charge of the general protection of investors.