Bond Power

Bond power is a legal and ethical document that is used to transfer the bond ownership from one party to the other. This document is used as an authority document that transferred the power of a registered bond from one party to the other party. In other words we can say that a bond power is a document that can be used as a substitute for the assignment on the back of the bond. That means bond power is a formal document that has a legal standing and it appoints a legal authority such as an attorney to shift the power and ownership of the bond from one party to any other party. When bond power is shifted from one party to the other the later party becomes the owner of all the benefits and liabilities associated with the bond. For example the new owner has to pay interest on the bond as well as the new owner is legally liable to pay any other liabilities associated with bond. In addition to that the new owner has right to enjoy bond yield and any benefits associated with bond.

In certain cases bond power is given status of an assignment that is completely separate from the certificate. This separation of the bond from the certificate is meant for some financial safety reading the bond holder. The assignment allows the lenders of the bonds to sell the securities associated with bonds as collateral against the bonds with assuming borrower default.

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