Bunny Bond

Bunny Bond

A bond with a provision that bondholders may, at their discretion, reinvest coupon payments in other bonds with the same interest rate and maturity. This protects bondholders from the risk that interest rates will fall by the time coupon payments are made, resulting in lower returns. It is also called a multiplier bond or a guaranteed coupon reinvestment bond. See also: Reinvestment risk, PIK.
References in periodicals archive ?
If interest rates increase, the bunny bond loses more in value because interest is reinvested at lower rates causing greater investor unrealized losses.
The shorts include ``Charlie on the Windmill'' (1917), ``The Novelty Shop'' (1936), ``Minnie the Moocher'' (1932), ``The Sinking of the Lusitania'' (1918), ``Snafuperman'' (1944), ``Bugs Bunny Bond Rally'' (1943) and ``Hell Bent for Election'' (1944).