Zero-Coupon Bond
/ˌzɪəroʊˈkoʊpɒn bɑːnd/
Definitions
- (n.) A debt security that does not pay periodic interest but is sold at a discount and redeemed at face value at maturity.
The investor purchased a zero-coupon bond to receive a lump sum upon maturity without interim interest payments.
Forms
- zero-coupon bond
- zero-coupon bonds
Related terms
See also
Commentary
Zero-coupon bonds require careful drafting to specify yield and redemption terms clearly, as interest accrues implicitly rather than via periodic payments.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.