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Open-End Indenture

Categories: Investing, Mutual Funds

It has nothing to do with dentures or figuring out which end to put them in, so stop asking.

And open-end indenture is just a license to borrow. Assuming that some very basic covenants are covered, like the previous year's financial performance providing enough operating cash flow to cover interest costs x many times, the company (or municipality) can then go out to the market and raise yet more debt—open endedly. (Hence, the catchy name.)

Basically, it's a good place to be and means you can get your hands on more cash.

Find other enlightening terms in Shmoop Finance Genius Bar(f)