Explanation

In corporate bond indentures, the trustee plays a crucial role in protecting bondholders' interests. Let's analyze each option:

Option A: CORRECT

• The trustee does have the authority to declare a default if the issuer misses a payment. This is one of the primary responsibilities of the trustee outlined in the indenture agreement.

Option B: INCORRECT

• The trustee cannot take action beyond what is specified in the indenture. Their powers and responsibilities are strictly limited to the terms of the indenture agreement.

Option C: INCORRECT

• While bondholders can request action from the trustee, the trustee is not required to act solely at their request. The trustee has independent duties and responsibilities defined in the indenture.

Option D: INCORRECT

• The trustee is typically paid by the issuer, not by the bondholders. This payment arrangement is established in the indenture agreement.

Key Points:

• The trustee acts as a fiduciary for bondholders
• Their powers are limited to those specified in the indenture
• They monitor the issuer's compliance with indenture terms
• They have the authority to declare defaults and take appropriate action as specified in the agreement