Bond power,

Definition of Bond power:

1. Bond power is a separate legal form that authorizes the transfer of ownership of a registered bond from one party to another, without endorsing the bond certificate. The bond power is mostly a substitute for the assignment on the back of the bond itself. It formally appoints an attorney-in-fact to transfer the ownership of the bonds.

2. Bond powers are also sometimes referred to as an assignment separate from the certificate. The separation of the authority from the bond certificate provides a measure of safety to the bondholder. The designation allows lenders to sell any securities pledged as collateral against the bond should the borrower default.

3. Instrument used in the US to transfer ownership (title) of registered-bonds from the current owner to, for example, a lender (as a collateral). Bond power assigns the power of attorney to a named entity for effecting the change of ownership in the register of bondholders maintained by the bond issuer. In effect, it serves the same purpose as the assignment form printed on the back of a registered bond certificate, but is more convenient because it may be exchanged, mortgaged, or sold separately from the certificate it represents.