discount bond


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Discount bond

Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.

Discount Bond

A bond or other debt instrument that is issued at a price below its face value. For example, a bond with par of $10,000 might be issued to an investor for $7000. All zero-coupon bonds are discount bonds.

discount bond

A bond selling at a price that is less than its par value. In addition to semiannual interest payments, a discount bond offers investors additional appreciation if the security is held until maturity.
References in periodicals archive ?
It is the second time that ICBC has sold the OTC bonds of China EXIM Bank and the product selected is the well-received discount bond among investors.
5bn to the market via the 14-month discount bond and the 10-year fixed-coupon bond auctions yesterday.
Gain on the disposition of a market discount bond is deemed to be attributable to market discount to the extent that discount has accrued during the holder's ownership.
However, note restrictions on this treatment of market discount bond income, including that such bonds may not have a maturity date of one year or less from their date of issue (Sec.
It is worth noting that, under current rules, the holder of a market discount bond does not have to annually include in gross income the accrued market discount.
However, the market discount bond rules supersede this general principle.
One-period nominal forward contracts, s periods ahead; these contracts represent a commitment in period t to purchase a one-period nominal discount bond in period t + s at the pre-specified dollar price [Q.
A pure discount bond provides its holder with a single payment upon maturity.
A variation is a Deep Discount Bond with Stepped Interest in which there is a low coupon but it increases in steps each five years.
A unit discount bond is a financial asset that entitles its owner to one unit of account at maturity without any intermediate coupon payments and without any default risk.
Any bond with a large final payment is partly a pure discount bond with a significant portion of its return coming in the form of capital gains or losses over time.
6bn), while in preparation the Treasury will be issuing 7-year FRN, 14-month discount bond and 10-year fixed-coupon bond on April 1 and 2.