Step-up Bond (redirected from steps up bond)

Step-up Bond

A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.

Notes:

In other words, the coupon "steps up". For example a five-year bond may pay a 4% coupon for the first two years of its life and a 6% coupon for the final three years.

See also: Bond, Bond Ladder, Coupon, Coupon Bond, Fixed-Income Security, Sinking Fund

---

Step-up bond

A bond that pays a lower coupon rate for an initial period, and then increases to a higher coupon rate. Related: Deferred-interest bond, payment-in-kind bond.