Bunny Bond

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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 ?
This reinvestment feature makes bunny bonds very similar to zero-coupon bonds.
Bunny bonds can be compared to bonds issued with detachable or nondetachable warrants.