Explanation:

Features and benefits of bearer debentures

Bearer debentures, on the other hand, can be transferred by mere delivery and hence, are payable to the bearer of the instrument. No records are maintained in the register of debenture holders and registration of transfer is not necessary. That is why they are also known as unregistered debentures.

• They are treated as negotiable instruments
• Bearer debentures are unregistered debentures that can be transferred by mere delivery. No records are maintained in the company’s debenture-holders’ register for the ownership of these securities.
• Such debentures are issued physically, i.e., on paper.
• In order to receive interest payments, the bondholder needs to submit the coupons for interest payment which are physically attached to the security to the bank or the issuing company.
• These debentures can be redeemed within thirty days from the date of maturity which is printed on the bond.
• Selling bearer debentures is relatively easy as no third party or intermediary is needed since these can be simply transferred by just handing over the certificate to the other person.