original-issue discount bond

Original Issue Discount Security

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 $7,000. All zero-coupon bonds are original issue discount debt.

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original-issue discount bond

A bond issued at a discount from par value. The discount occurs when the coupon on the bond is less than the market rate of interest for a bond of similar risk and maturity. Also called deep-discount bond. Compare minicoupon bond. See also zero-coupon bond.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.