Bearer Bond

DEFINITION of 'Bearer Bond'

A fixed-income instrument that is owned by whoever is holding it, rather than having a registered owner.

Coupons representing interest payments are likely to be physically attached to the security and it is the bondholder's responsibility to submit the coupons for payment. As with registered bonds, bearer bonds are negotiable instruments with a stated maturity date and coupon interest rate.

BREAKING DOWN 'Bearer Bond'

Bearer bonds are getting harder and harder to find these days, especially within developed economies. While they are fairly common in many parts of the world (mainly places where anonymity is an issue), the fact that little protection or recourse exists for holders against issues such as theft has taken away their applicability in recent decades. Furthermore, most bond instruments aren't even physically issued anymore, but exist only in the computerized records of brokers and custodians.


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