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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.

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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