A bond contract (bond indenture or trust indenture) that guarantees that the collateral used to secure the bond cannot be used again to a security supporting another bond issue. An indenture is a legal and binding provision usually embedded in bond agreements, real estate, or bankruptcy cases. A closed-end bond indenture includes an additional bonds covenant that stipulates that the issuer shall not sell additional bonds with equal claims to the issuer’s pledged revenue (as opposed to an open-end indenture).

A closed-end indenture implies that the issuer may only use the specified collateral on a single bond issue. The issuer is not permitted to issue additional bonds that are secured by the same claim on the same collateralized assets associated with the original issue.