Definition

1. Noun:
   • A type of debt security: A coupon bond is a bond issued with detachable coupons that must be presented to the issuer or a paying agent to receive periodic interest payments.
   • Historical financial instrument: It refers to a traditional, physical bond certificate where ownership of the coupon entitles the holder to an interest payment, distinct from registered or book-entry bonds.

Usage Examples

• Noun:
  • The investor clipped the coupons from the coupon bond and mailed them to receive the semi-annual interest.
  • Before the digital era, coupon bonds were a common way for corporations and governments to raise capital.

Advanced Usage

• "Detachable coupon": Refers to the individual slips attached to the bond certificate, each representing a single interest payment.
  • Each detachable coupon on the bond was marked with a specific payment date.
• "Bearer instrument": Coupon bonds are often bearer instruments, meaning the physical holder of the coupon is presumed to be the owner entitled to payment.
  • Because it was a coupon bond, possession of the coupon was sufficient to claim the interest, much like cash.

Variants and Related Words

• Bearer bond: A bond that is payable to the person possessing it, often issued with coupons. A coupon bond is typically a type of bearer bond.
• Registered bond: A bond whose ownership is recorded by the issuer, contrasting with a bearer/coupon bond where physical possession is key.
• Zero-coupon bond: A bond that pays no periodic interest but is issued at a deep discount, providing profit at maturity. This is a distinct type of bond without coupons.

Synonyms

• Bearer bond (when referring to its negotiable, unregistered nature).
• Interest coupon bond.

Related Phrases

• "To clip a coupon": Literally, to cut off a coupon from the bond for submission; figuratively, to receive investment income with minimal effort.
  • In the past, retirees relied on clipping coupons from their bonds for income.
• "Coupon payment date": The specific date on which an interest payment is due, as printed on the coupon.
  • The next coupon payment date for the bond is June 30th.

Noun

1. a bond issued with detachable coupons that must be presented to the issuer for interest payments