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Conference nyoss1::market_investing

Title:	Market Investing

Moderator:	2155::michaud

Created:	Thu Jan 23 1992
Last Modified:	Thu Jun 05 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	1060
Total number of notes:	10477

403.0. "Questions on coupon bearer bond" by ICS::KAUFMANN (Life is short; pray hard) Wed Mar 03 1993 11:24

    My wife and I just received a corporate bond from my inlaws.  Being a
    novice with bonds, I have some general questions:
    
    The bond is a bearer bond, so I assume that no name transfer needs to
    be made.  Is this a correct assumption?
    
    The bond is a genuine coupon bond, with the paper coupons that get cut
    with scissors every 6 months.  Where can I redeem the coupons?  My
    broker (StockCross) indicated that they don't handle this.  BTW, the
    last 4 coupons (September 91, March 92, September 92, March 93) are
    still on the bond.  Are they still valid, or do they expire after a
    given period?
    
    Can I sell this bond myself, without going through a broker?  After
    all, it is a bearer bond.
    
    Would a broker hold this bond for me and send me the $25 (less
    commission) every 6 months?
    
    Any other advice and comments are appreciated.
    
    Bo

T.R	Title	User	Personal Name	Date	Lines
403.1		NOTIME::SACKS	Gerald Sacks ZKO2-3/N30 DTN:381-2085	`Wed Mar 03 1993 11:41`	7
	The coupons don't expire. I believe you can redeem them at any commercial bank (though you'll probably need to be a customer, and they may charge a fee). If you had a full-service broker, they'd handle the whole thing -- clipping coupons and keeping track of calls and the like. You can sell anything yourself if you can find a buyer. If you decide not to deposit the bond in a brokerage account, be sure to put it someplace safe -- preferably a safe deposit box.
403.2		SDSVAX::SWEENEY	Patrick Sweeney in New York	`Wed Mar 03 1993 12:01`	23
	A bearer bond. How quaint. The bond itself will specify where you can go in person to get your interest or where you can mail it (insured, please), if you like the do-it-youself approach. "Any commercial bank" is not going to pay on any municipal or corporate bond. Maybe, if they have a trustee, transfer agent, payment agent, or registrar relationship with the issuer they will. If you have a "private banking" account with your bank, maybe they will act as a stock broker/investment adviser will. One value-added of stock brokers/investment advisers/etc. is that they will hold onto such bonds and clip the coupons for you and to obtain prompt payment from the payment agent. They probably want to convert the paper security to a book entry as well. For bonds that are "callable" they will obtain a prompt redemption as well. Bearer bonds, once upon a time, were a means to avoid taxes. This is no longer true inside the United States where each coupon transaction requires identification of the payee. The securities industry _hates_ bearer securities.
403.3	Lock it away	VMSDEV::HALLYB	Fish have no concept of fire.	`Wed Mar 03 1993 12:55`	6
	Sounds like you may have an antique in the making, with a floor value of it face value. As long as the underlying company doesn't go bankrupt. John
403.4	Some Banks Will Take Coupons	AKOCOA::GLANTZ		`Wed Mar 03 1993 15:31`	7
	My local savings bank accepts my bearer bond coupons, and they even give me instant cash for them. They even accept the matured bond itself, provided they have a realtionship with the transfer agent. Cutting out the teeny-tiny coupons is fun. Takes me back to first grade. Except I am so much older now that I cannot read the teeny- tiny print on the teeny-tiny coupons.