Zero coupon bond

• A corporate or municipal debt security traded at a deep discount from face value. The bond pays no interest; rather, it may be redeemed at maturity for its full face value. It may be issued at a discount, or it may be stripped of its coupons and repackaged.

• 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.

• Such a debt security pays an investor no interest. It is sold at a discount to its face price and matures in one year or longer.

• Is a security which the interest and/or principal has been discounted to be offered at less than the stipulated principal or coupon amount due at maturity or early option payment. These securities effectively behave like treasury bills or other paper offered at an original discount. Zero coupon bonds can have conversion factors and other features implicitly embedded or explicitly stated.


Follow this link for all the terms related to bond.

 Embedded terms in definition
Conversion factor
Coupon bond
Debt security
Face value
Maturity date
Treasury bill
 Related Terms
Accrual bond
Ban or bond anticipation note
Bearer bond
Bond agreement
Bond arbitrage hedge funds
Bond covenant
Bond equivalent basis
Bond equivalent yield
Bond fund
Bond indenture
Bond indexing
Bond points
Bond quote
Bond rating
Bond refunding decision
Bond value
Bull bear bond
Bulldog bond
Call price bond
Callable bond
Collateral trust bond
Convertible bond
Corporate bond
Corporate bond equivalent
Coupon bond
Coupon equivalent yield
Coupon payments
Coupon rate
Coupon swap
Current coupon
Current coupon issues
Debenture bond
Deep discount bond
Discount bond
Dollar price of a bond
Equivalent bond yield
Extendable bond
Face value of a bond
Fidelity bond
Flower bond
Foreign bond
Foreign bond market
Full coupon bond
General obligation bond
Government bond
High coupon bond refunding
High yield bond
Income bond
Indenture of a bond
Indexed bond
Industrial revenue bond
Inflation indexed treasury bond
Insured bond
International bond
Jump bond
Junk bond
Level coupon bond
Limited tax general obligation bond
Long coupon
Low coupon bond refunding
Mismatch bond
Mortgage bond
Municipal bond
Municipal bond fund
Net coupon
Par bond
Pass through coupon rate
Payment in kind pik bond
Performance bond
Positive covenant of a bond
Premium bond
Prerefunded bond
Pure discount bond
Put bond
Refunded bond
Registered bond
Revenue bond
Samurai bond
Series bond
Series ee bond
Series hh bond
Shogun bond
Short coupon
Single payment bond
Speculative grade bond
Step up bond
Straight bond
Straight bond value
Stratified sampling bond indexing
Stripped bond
Subordinated debenture bond
Sushi bond
T bond
Term bond
Treasury bond
U.s. treasury bond
Variable rated demand bond vrdb
Weighted average coupon
Yankee bond
Z bond
Z or accrual bond
Zero balance account
Zero beta portfolio
Zero cost collar
Zero curve
Zero growth model
Zero investment portfolio
Zero minus tick
Zero one integer programming
Zero or low coupon bonds
Zero plus tick
Zero prepayment assumption
Zero sum game
Zero uptick

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