Coupon rate

(redirected from Nominal Yields)

Coupon rate

In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year.

Coupon Rate

The interest rate that a bond pays to a bondholder, usually semi-annually. The coupon rate is stated on the bond. This is also called the nominal yield or the yield rate.

Coupon rate.

The coupon rate is the interest rate that the issuer of a bond or other debt security promises to pay during the term of a loan. For example, a bond that is paying 6% annual interest has a coupon rate of 6%.

The term is derived from the practice, now discontinued, of issuing bonds with detachable coupons.

To collect a scheduled interest payment, you presented a coupon to the issuer or the issuer's agent. Today, coupon bonds are no longer issued. Most bonds are registered, and interest is paid by check or, increasingly, by electronic transfer.

References in periodicals archive ?
Michael Reynolds, investment strategy officer at Glenmede Trust Company believes persistently low inflation in developed economies "should constrain nominal yields, and tariffs are more likely to weigh on prices via demand destruction."
A further escalation of trade tensions has resulted in a considerable drop in US nominal yields, a drop in US real yields, increased Fed rate cut expectations and a weaker US dollar."
Nominal yields on the longer-end have had difficulties recently breaking out to new highs.
Third, term structure models assume stationarity for nominal yields. Decomposing long-term yields into expectations of the future short-term rate and term premiums is one core question in the term structure literature (Duffee 2002; Wright 2011; Creal and Wu 2016).
But for now the spike in nominal yields has created an unfavourable environment.
Even nontraditional investors, such as foreigners who can't benefit from the tax-exempt status of most munis, are attracted to the muni market because of relatively high nominal yields compared to those of overseas, said Thomas Casey, senior portfolio manager, Tax-Sensitive Strategies at Standish Mellon Asset Management.
Indeed, about $6 trillion worth of government bonds around the world today have negative nominal yields. The next stage of unconventional unconventional monetary policy - if the risks of recession, deflation and financial crisis sharply increase - could have three components.
Meanwhile, the ECB is expected to introduce additional unconventional measures to drive rates in the opposite direction, even if that means putting further downward pressure on some government bonds that are already trading at negative nominal yields.
We focus on forecasts of the quarterly average level of 7 different interest rates: the federal funds rate and the nominal yields of Treasury securities at 6 different maturities between 3 months and 10 years.
Adrian Hartshorn, Senior Partner in Mercer s Financial Strategy Group said, Although the improvement in nominal yields is welcome, any decision to lock into historically low yields by hedging at current levels requires careful consideration, and should be balanced against other hedging opportunities.
"Given the backdrop of low inflation, low nominal yields and the significant compression in valuations driven by the wall of CB liquidity, real returns/yields are now the dominant differentiator in terms of investment flows and currency support.