Bond Power

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DEFINITION of 'Bond Power'

A separate legal form that authorizes the transfer of ownership of a registered bond from one party to another. The bond power is essentially a substitute for the assignment on the back of the bond. It formally appoints an attorney-in-fact to transfer the ownership of the bonds.

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BREAKING DOWN 'Bond Power'

Bond powers are also sometimes referred to as an assignment separate from certificate. The separation of the power from the bond provides a measure of safety for the bondholder. The assignment allows lenders to sell any securities pledged as collateral against the bond should the borrower default.

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