Bearer bond

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A bearer bond or bearer note is a bond or debt security issued by a business entity such as a corporation or a government. As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered—no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the paper on which the bond is issued is the presumptive owner of the instrument. This is useful for investors who wish to remain anonymous.

Recovery of the value of a bearer bond in the event of its loss, theft, or destruction is usually impossible. Some relief is possible in the case of United States public debt.^[1] Furthermore, while all bond types state maturity dates and interest rates, bearer bond coupons for interest payments are physically attached to the security and must be submitted to an authorized agent in order to receive payment.^[2]

Issuance of new bearer bonds has been effectively outlawed in the United States since the 1980s due to their use in illegal activities, but bearer bonds issued before this date can be redeemed if the issuer still exists.