stepped coupon bond

Stepped Coupon Bond

A callable bond issued with a low coupon rate that gradually increases over the life of the bond. The increases occur at regular intervals stated in the bond indenture. It is also called a step-up coupon security or a dual coupon bond

stepped coupon bond

A bond with interest coupons that change to predetermined levels on specific dates. Thus, a stepped coupon bond might pay 9% interest for the first 5 years after issue and then step up the interest every fifth year until maturity. Issuers often have the right to call the bond at par on the date the interest rate is scheduled to change. Also called dual coupon bond, rising-coupon security, step-up coupon security.
References in periodicals archive ?
This article presents the straight bullet bond modification called stepped coupon bond. The modification is aimed at transferring the burden of interest bond payback till later with the simultaneous maintenance of interest payment and debt issue cost control.
One of the ways to raise it is to issue long-term debt securities of the stepped coupon bond construction.
The idea of high risk bonds (stepped coupon bonds).