Legal Definitions - interest warrant

Definition: An order drawn by a corporation on its bank directing the bank to pay interest to a bondholder.

Example: Company A issues bonds to investors. As part of the agreement, Company A promises to pay interest to the bondholders. To fulfill this promise, Company A issues an interest warrant to its bank, instructing the bank to pay the agreed-upon interest to the bondholders.

Explanation: An interest warrant is a financial instrument used by corporations to fulfill their obligation to pay interest to bondholders. It is a written order that directs the corporation's bank to pay the interest to the bondholders. The example illustrates how a company uses an interest warrant to fulfill its promise to pay interest to bondholders.