Introduction

High yield bonds are regulated by securities laws and, with very limited exceptions, are governed by New York law, no matter where the issuer is located. The bonds will be issued pursuant to an indenture, pursuant to which a trustee is also appointed to represent the interests of bondholders.

For more information on high yield bonds, see Practice Notes: Introductory guide to high yield bonds and High yield debt in 11 jurisdictions worldwide. For an overview of the core transaction documents required to document a high yield bond issuance, see Checklist: Issuing high yield bonds—documents list.

In addition to setting out the principal covenants of the issuer, the indenture contains provisions which are necessary for the administration of the high yield bonds and the performance by the bond trustee of its functions. The bond trustee is appointed primarily to perform administrative functions on behalf of bondholders pre-default and to take enforcement action on behalf of the bondholders where necessary.

For a discussion of the material terms and covenants of high yield bonds, see: