A bond that pays no coupons, is sold at a deep discount to its face value, and...
(1) Bonds that pay the investor an above-market coupon rate as long as a reference rate is between preset levels established at the time the security is issued. A type of structured note. Also called range bonds. (2) A type of CMO security that does not pay holders periodic interest in cash. Instead, periodic interest for these bonds is accrued. It is added to the principal amount due to the holder at a later date. See Z tranche.
Accrued discount Accrued market discount
A 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. Also called zero-coupon bond. These bonds are sold at a huge discount from their par value. On maturity the holder is paid the par value of the bond
If you have a bond that earns interest until you cash it, but you don't get any of the money until you cash it, it's an accrual bond. If you have one of these bonds, it probably says Series A, Series B, Series C, Series D, Series E, Series EE, Series F, Series I, or Series J on it.
a fixed-interest bond that is issued at its face value and repaid at the end of the maturity
This is the same as a zero coupon bond.
same as a zero-coupon bond. An issue in which the interest is added to the principle and not paid to the bond holder until maturity.
A bond in which interest accumulates, but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity. Also known as a zero-coupon bond.
A type of CMO bond, also called a Z bond.
A bond that accrues interest which is added to the remaining principal and paid to the investor at maturity as opposed to periodically, over the term of the bond.
See Zero Coupon Bond.
accrued interest accrued market discount