Bearer-Bond.com

What is a Bearer Bond?

Bearer bonds, also known as coupon bonds, allow the owner or “bearer” of the coupon to collect interest by presenting the clipped coupon to the issuer's paying agent. Bearer bonds are extremely rare and were essentially eliminated by the Tax Equity and Fiscal Responsibility Act of 1982. According to the Bureau of the Public Debt (http://www.publicdebt.treas.gov), .14% of all outstanding marketable securities are in bearer form. Bearer bonds do not require the issuer's transfer agent to record the bondholder's name. Title to the bearer security passes on delivery. Bearer bonds are as liquid as cash and, when they were popular, were often used to shift ownership of corporations so as to minimize tax consequences. It was this attribute that led to their demise in 1982 in the United States.