A debt security that does not offer any interest (a coupon), but trades at a...
These bonds are so named because the coupon rate (the amount of interest paid) is zero. Rather than paying interest on a periodic basis, these bonds are issued at a fraction of their par value and increase in value as they approach maturity (e.g., U.S. savings bonds). Also known as an accrual bond.
bond which pays no coupons, is sold at a deep discount to its face value, and matures at its face value. A zero-coupon bond has the important advantage of being free of reinvestment risk, though the downside is that there is no opportunity to enjoy the effects of a rise in market interest rates. Also, such bonds tend to be very sensitive to changes in interest rates, since there are no coupon payments to reduce the impact of interest rate changes. In addition, markets for zero-coupon bonds are relatively illiquid. Under U.S. tax law, the imputed interest on a zero-coupon bond is taxable as it accrues, even though there is no cash flow. See Also accrued interest, coupon bond, deferred interest bond, strip, zero-coupon convertible
A bond that pays no interest and matures at face value. It provides a return to investors by being sold at a deep discount. Known also as an accrual bond, a deferred interest bond and a strip.
the commonest form of zero-coupon security
a bond for which no periodic interest payments are made
a bond sold without interest-paying coupons
a bond that does not pay a coupon bond legal definition of bond
a bond that does not pay a coupon (interest) to its investors on a regular basis
a bond that is bought at a deep discount from its face value
a bond that is sold to an investor at a discount
an example of a bond with OID
an example of an OID
A bond where principal and interest are paid at maturity.
bond in which no periodic coupon is paid over the life of the contract. Instead, both the principal and the interest are paid at the maturity date.
A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value. Also known as an accrual bond.