What Are Bearer, Registered, Mortgage, Debenture And Convertible Bonds?


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Bearer : These bonds do not carry the name of the investor or its holder. Any person who carrier or bears it is considered its owner. They are easily transferred from one person to another without intimating the issuing company.

Registered bonds: Registered bonds carry the name and address of the owner. The same record is also maintained with company at it office. When such bonds change hands the name and address of the new owner is printed on the back of the bond certificate and on the registers of the company cancelling the name and address of the former investor. The interest is paid to the person whose name is registered with the company.
Mortgage bonds: They refer to secured bonds. When mortgage bonds are issued a certain amount of the company assets are held as a Security with the trustees. In most cases bonds are secured.

Debenture Bonds : it is another kind referring to unsecured loans. Since they represent a greater risk they carry an offsetting higher rate of interest making them more attractive to the lenders.

Convertible Bonds when bonds can be changed into share after a stipulated period they are knows as convertible bonds. This conversion depends on the will of the bondholder. If converted the bondholders turn shareholder.

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