Series 79 practice questionmediumDebt Offerings
What is the function of a trustee in a public debt offering?
- ATo stabilize the notes in the aftermarket
- BTo verify accredited investor status in a PIPE
- CTo perform issuer audit procedures
- DTo act on behalf of bondholders under the indenture and administer the debt instrument✓ Correct answer
Explanation
Why D — To act on behalf of bondholders under the indenture and administer the debt instrument
To act on behalf of bondholders under the indenture and administer the debt instrument The trustee carries out ministerial and enforcement duties under the indenture framework. That role becomes especially important if defaults or covenant breaches occur.
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