bearer bond
Noun: A bearer bond is a type of fixed-income security that is owned by whoever physically holds the bond certificate. It is payable to the bearer, meaning no ownership is recorded by the issuer and the holder is presumed to be the owner. Interest is paid via detachable coupons that the bearer must physically present to the issuer or a paying agent to receive payment.
Bearer bonds are financial instruments. The key characteristic is that possession equates to ownership. * The company issued bearer bonds to raise capital anonymously. * To collect the interest, the bearer bond holder must clip and present the coupon. * Due to concerns about money laundering and tax evasion, bearer bonds are now rare in many countries.
- "Coupon bond" is sometimes used synonymously with bearer bond, emphasizing the method of interest collection. However, not all coupon bonds are necessarily in bearer form.
- The anonymity of bearer bonds made them attractive for certain transactions but also led to their decline in regulated markets.
- Registered Bond: The opposite of a bearer bond. Ownership is recorded by the issuer, and payments are sent directly to the registered owner.
- Coupon: The detachable part of a bearer bond that is presented for an interest payment.
- Coupon Bond (in specific contexts)
- Unregistered Bond
- Registered Bond
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a bond issued with detachable coupons that must be presented to the issuer for interest payments
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