Who typically serves as a Trustee or paying agent in bond transactions?

In bond transactions, it is common for a commercial bank to serve as a Trustee or paying agent. This role involves monitoring compliance with the terms of the bond and ensuring that all obligations are met, such as making timely interest and principal payments to bondholders. The commercial bank acts on behalf of the bondholders, providing a level of oversight and assurance that the terms of the bond agreements are adhered to.

This function is crucial because it protects the interests of the bondholders and ensures transparency in the management of the funds raised through the bond issuance. The bank's expertise in financial management and compliance helps to maintain the integrity of the bond transaction, making it a preferred choice in this capacity.