as to form, bonds may be registered or coupon bonds.
Registered bonds may be subdivided into those which are "registered
both as to principal and interest" and those which are "registered as
to principal only."
name of the owner of a registered bond is written on its face, and it
cannot be negotiated except by endorsement and transfer on the books of
the issuing organization. In
other words, registered bonds are transferred in the same manner as stock
certificates. The bonds contain
a form of assignment and transfer on the reverse side.
Registration is a privilege offered optionally in the sale of certain
issues of coupon bonds to appeal to those investors who may wish issues
of coupon bonds to appeal to those investors who may wish to avail themselves
of the opportunity to protect the equitable owner, in case of theft.
registration of bonds necessarily entails the maintenance of complete
records by the issuing organization.
Usually, therefore, a bank or trust company is appointed to act
as registrar. The registrar
maintains the necessary records, which show the owner's name and address,
when sales occur, and the name of the transferor and transferee.
In this way, the ownership of each bond can be traced.
bonds are registered as to principal only, coupons are attached, but such
coupons are negotiable by delivery just like those detached from coupon
bonds. The principal, however,
can only be negotiated by endorsement and transfer of title to the buyer
on the book of the registrar. These
are known as registered coupon bonds.
bonds are registered both as to principal and interest, no coupons are
attached. Checks for the interest
are remitted to the registered holder at each coupon date and a check
for the principal at maturity.
market price of registered bonds is usually somewhat less than that of
coupon bonds of the same issue because of the inconvenience incident to