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Positive Attributes of Bearer Bonds

Issuer's Benefits
Bearer bonds require less paperwork on the part of the issuer's transfer agent than do other, similar securities. Since bondholder names are not recorded, the issuer does not have to send annual or quarterly notices, eliminating costs on the part of the issuer.

Bondholder's Benefits
Coupon bonds allow the owner to remain anonymous. Bearer bonds often pay at a higher interest rate because of the increased risk taken on by the bondholder.

Large investors can purchase vast numbers of corporate of federal bonds without attracting the attention of competitors. Bearer bonds are extremely liquid, and can be exchanged without the intervention of the issuer's transfer agent. This type of liquidity is advantageous to prospective investors wanting to invest in international bond markets. Bearer bonds are no longer issued in the US; investors may want to consider investing in Eurobonds, which are usually in bearer bond form.