Payments to Bondholders

A paying agent is an entity, usually a bank, that is engaged by the issuer to handle the interest and principal payments to bondholders. The paying agent is often the same entity as the trustee. The issuer engages a transfer agent as well, which keeps records of bond ownership and bond transfers. This, too, is often the same entity as the trustee.

The issuer also employs a registrar to make sure that a cancellation accompanies each transfer of a bond so that outstanding bonds do not exceed the number issued. The registrar also determines the ownership of the bonds for the next i