Registered Bond

A registered bond is one registered in the name of the owner, and the bond itself bears his name. Such a bond is transferable the same as a stock certificate. The bond itself contains a form for assignment and transfer. When a registered bond is transferred a new bond is issued for the old one just as when a stock certificate is transferred a new certificate is issued for the old one.

The interest on a registered bond is paid by check, which is sent by mail to the postoffice address of the owner of the bond. Due notice of change of address should, therefore, be given. The old address should be given as well as the new one.

There are some registered coupon bonds, but such issues are not numerous.

Registered Coupon Bond

A bond the principal of which is payable only to the one whose name is inscribed on it, and in whose name also the bond is registered (entered on the books of the company issuing it), while the coupons calling for the payment of the interest as it becomes due, are payable to the bearer.

Rehypothecation

The hypothecation again of collateral already hypothecated. Rehypothecation, except by consent of the owner of the collateral, is illegal.

Released Indorsed Bond

Any indorsement on a coupon bond stating that it has been deposited as security for bank circulation (bank notes) or for insurance requirement may be released by an acknowledgment of the release before a notary public; it will then be a delivery in accordance with New York Stock Exchange rules as a released indorsed bond.

Reorganization

When the financial reconstruction or rehabilitation of a railroad or other corporation is voluntary - that is, by concurrence of the security-holders - the term readjustment applies. When the financial reconstruction is compulsory - that is, when it is effected by a receivership and foreclosure - the term reorganization applies. Most reconstructions are compulsory; they seldom can be effected except by legal process following insolvency.

The method of reorganization is ordinarily as follows: After default has been made in interest on bonds, say the first mortgage bonds, a receiver is appointed, after which a plan of reorganization is formulated. Provision usually is made in the plan whereby the first mortgage bonds, together with the accumulated unpaid interest, are to be paid in full. Such holders as may desire to do so take for their bonds, bonds of a newly formed company, with perhaps stock for the unpaid interest. Such holders as prefer cash for their bonds and unpaid interest are paid in cash. It sometimes is the case that the holders of bonds who take bonds of the new company for their old bonds receive the unpaid interest in cash.

The money to pay those bondholders who prefer cash (and to pay unpaid interest if it is to be paid in cash) and to provide other needed funds and working capital, is raised by levying an assessment on the stock (on the holders of the stock at so much per share). Then an order for sale of the property under foreclosure is obtained from the court (the property being under the control of the court after the appointment by it of a receiver).

The sale wipes out the bonds and the stock. The proceeds of the sale, however, must go toward the liquidation of the mortgage debt. The property (generally) is bid in by a committee of the bondholders for the benefit of the bondholders. The reorganization plan (generally) is primarily in the interest of the bondholders and only secondarily in the interest of the stockholders.

Repudiation

The rejection, in whole or in part, of a contract, debt or obligation. The term applies in particular to the rejection or mandatory scaling of its debt by a government.

The repudiation, as applied to the rejection of a debt by a state, was first used in 1841 when the state of Mississippi repudiated bonds issued to railroad companies which failed to comply with conditions on which they received them.

Rupee Paper

Securities of the government of India, interest and principal being payable in rupees in India and by bills of exchange on Calcutta in England.

Scrip

Usually the term is applied to a certificate for a fraction of a share of stock and usually, also, scrip is convertible into shares when presented in amounts equal to the face value of a full share.

It has no voting power or dividend rights until converted into full shares of stock, although sometimes interest is paid on it.

Scrip was also the name given to United States paper currency of denomination less than $1, which is no longer issued; such money was commonly called "shin plasters."

In Great Britain it is the practice to issue scrip to represent instalments paid on subscriptions for stock; when all instalments are paid the scrip is exchanged for stock certificates.