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Coupon |
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Definition of CouponCouponDetachable certificate attached to a bond that shows the amount of CouponThe annual interest payment associated with a bond. couponThe interest payments paid to the bondholder. CouponThe periodic interest payment made to the bondholders during the life of the bond.
Related Terms:Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Coupon paymentsA bond's interest payments. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Current-coupon issuesRelated: Benchmark issues Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. High-coupon bond refundingRefunding of a high-coupon bond with a new, lower coupon bond. Level-coupon bondBond with a stream of coupon payments that are the same throughout the life of the bond. Long coupons1) Bonds or notes with a long current maturity. Low-coupon bond refundingRefunding of a low coupon bond with a new, higher coupon bond. Long coupons1) Bonds or notes with a long current maturity. Pass-through coupon rateThe interest rate paid on a securitized pool of assets, which is less than the rate Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Zero coupon bondSuch a debt security pays an investor no interest. It is sold at a discount to its face price Zero-coupon bondA bond in which no periodic coupon is paid over the life of the contract. Instead, both the Coupon / CouponsThe periodic interest payment(s) made by the issuer of a bond Coupon RateThe rate of interest paid on a debt security. Generally stated on an Zero-coupon BondA security that makes no interest payments; it is sold at a discount Coupon datesThe dates when the coupons are paid. Typically a bond pays Coupon rateThe nominal interest rate that the issuer promises to pay the Zero curve, zero-coupon yield curveA yield curve for zero-coupon bonds; Zero-coupon bond, or ZeroA bond that, instead of carrying a coupon, is sold coupon rateAnnual interest payment as a percentage of face value. Coupon BondAny bond with a coupon. Contrast with discount bond. Zero-Coupon BondSee discount bond. Accrued interestThe accumulated coupon interest earned but not yet paid to the seller of a bond by the Bearer bondBonds that are not registered on the books of the issuer. Such bonds are held in physical form by Benchmark issuesAlso called on-the-run or current coupon issues or bellwether issues. In the secondary Break-even payment rateThe prepayment rate of a MBS coupon that will produce the same CFY as that of Current yieldFor bonds or notes, the coupon rate divided by the market price of the bond. Cushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a Deep-discount bondA bond issued with a very low coupon or no coupon and selling at a price far below par Discount bondDebt sold for less than its principal value. If a discount bond pays no interest, it is called a Dual-currency issuesEurobonds that pay coupon interest in one currency but pay the principal in a different Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be Euro straightA fixed-rate coupon Eurobond. Fixed-dollar obligationsConventional bonds for which the coupon rate is set as a fixed percentage of the par value. GenericRefers to the characteristics and/or experience of the total universe of a coupon of MBS sector type; Give upThe loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon Interest paymentsContractual debt payments based on the coupon rate of interest and the principal amount. Inverse floating rate noteA variable rate security whose coupon rate increases as a benchmark interest rate declines. Lag response of prepaymentsThere is typically a lag of about three months between the time the weighted Liquid yield option note (LYON)Zero-coupon, callable, putable, convertible bond invented by Merrill Liquid yield option note (LYON)Zero-coupon, callable, putable, convertible bond invented by Merrill Lynch & Co. Pass-through rateThe net interest rate passed through to investors after deducting servicing, management, Payment-In-Kind (PIK)bond A bond that gives the issuer an option (during an initial period) either to make PickupThe gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds. Presold issue An issuethat is sold out before the coupon announcement. Pure-discount bondA bond that will make only one payment of principal and interest. Also called a zerocoupon Put provisionGives the holder of a floating-rate bond the right to redeem his note at par on the coupon Realized compound yieldYield assuming that coupon payments are invested at the going market interest Red herringA preliminary prospectus containing information required by the SEC. It excludes the offering Return-to-maturity expectationsA variant of pure expectations theory which suggests that the return that an SafekeepFor a fee, bankers will hold in their vault, clip coupons on, and present for payment at maturity SectorRefers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon. Spot rateThe theoretical yield on a zero-coupon Treasury security. Step-up bondA bond that pays a lower coupon rate for an initial period which then increases to a higher Strip mortgage participation certificate (strip PC)Ownership interests in specified mortgages purchased Substitution swapA swap in which a money manager exchanges one bond for another bond that is similar in Theoretical spot rate curveA curve derived from theoretical considerations as applied to the yields of Total returnIn performance measurement, the actual rate of return realized over some evaluation period. In True interest costFor a security such as commercial paper that is sold on a discount basis, the coupon rate Variable rate CDsShort-term certificate of deposits that pay interest periodically on roll dates. On each roll Yield to callThe percentage rate of a bond or note, if you were to buy and hold the security until the call date. Yield to maturityThe percentage rate of return paid on a bond, note or other fixed income security if you DurationThe expected life of a fixed-income security considering its coupon Forward rateThe future interest rate of a bond inferred from the term Issue dateThe date a security is first offered for sale. That date usually Long rateThe yield on a zero-coupon Treasury bond. Macaulay durationA widely used measure of price sensitivity to yield Odd first or last periodFixed-income securities may be purchased on dates Treasury bondLong-term debt obligation of the U.S. government that makes Yield a. Measure of return on an investment, stated as a percentage of price. current yieldAnnual coupon payments divided by bond price. Discount BondA bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price.
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