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Source: Encyclopedia of Banking & Finance (9h Edition) by Charles
(We recommend this as work of authority.)
This term has
A bond endorsed by a person or corporation other than the maker whose
direct obligation it is. Endorsed
bonds usually arise out of a consolidation in which the parent corporation
endorses the bonds of its subsidiary.
In order to strengthen their market value, or as collateral for loans,
the parent company may endorse them.
A guaranty is implied in an endorsed bond, the endorser becoming
liable in case of nonpayment, just as in the case of an endorser of a note.
The terms of the guaranty are written upon the bonds themselves,
or upon a separate document. The
underlying security is not changed by the endorsement.
A bond with writing or signatures extraneous to the text written
thereon. By a rule of the New York Stock Exchange, a coupon bond bearing
an endorsement of a definite name of a person, firm, occupation, association,
etc., in conjunction with words of condition, qualification, direction,
or restriction not properly pertaining thereto as a security, shall not
be a delivery unless sold specifically as an endorsed bond.
This rule also applies to bonds with coupons bearing such
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