- coupon
- The interest rate on a debt instrument expressed in terms of a percent on an annualized basis that the issuer guarantees to pay the holder until maturity. Chicago Board of Trade glossary————coupon, coupon rate(1) The rate of interest received by the holder of a security. Not necessarily the same as the yield realized by the holder.See rate.(2) For pass-through securities, the holder's coupon rate is the gross coupon of the underlying loans less servicing fees and any agency guarantee fees. American Banker Glossary————The contractual interest obligation a bond or debenture issuer covenants to pay to its debtholders. Bloomberg Financial Dictionary————The rate of interest payable on a bond. For example a bond with a 10% coupon and a nominal value of £100 will pay annual interest of £10 in total, regardless of the price at which the bond is trading in the market. Dresdner Kleinwort Wasserstein financial glossary————( i) On bearer stocks, the detachable part of the certificate exchangeable for dividends.(ii) Denotes the rate of interest on a fixed-interest security. Exchange Handbook Glossary————The interest rate on a fixed-interest security.————Generally, the nominal annual rate of interest of a fixed income security expressed as a percentage of the principal value. This interest is paid to the holder of the security by the borrower. The coupon is generally paid annually, semi-annually or, in some cases quarterly depending on the type of security. LIFFE————This is a regular payment received by the bondholder over the lifetime of the bond. The coupon rate is expressed as a percentage of the face value of the bond. London Stock Exchange Glossary————Interest paid to the holder of a bond. See Dividend NYSE Euronext Glossary
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coupon cou‧pon [ˈkuːpɒn ǁ -pɑːn] noun1. [countable] FINANCE a small piece of paper attached to certain types of bond, that you tear off and hand in so as to receive interest:• The frequency of coupon payments can differ between bonds; for example, some bonds pay coupons quarterly, others pay coupons annually.
• a new two-year bond with a 10% coupon
• The high coupon is there to compensate high risk.
3. [countable] a printed piece of paper given to customers by the seller of a product, allowing the customer to pay less than usual for the product when they next buy it, or to get a free gift:• a 20p-off coupon
4. [countable] a printed piece of paper given to people by the government, allowing them to buy a particular product or get something for free, usually during a war:• ration coupons
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The interest paid on a bond expressed as a percentage of the face value. If a bond carries a fixed coupon, the interest is paid on an annual or semi-annual basis. The term also describes the detachable certificate entitling the bearer to payment of the interest.► See also Bullet Bond, Bearer Forms (Bearer Shares).* * *
coupon UK US /ˈkuːpɒn/ noun [C]► COMMERCE a piece of paper or card that customers can use to buy goods and services at a lower price, or to get them free: »This week shoppers can use discount coupons to get money off gasoline.
cut out/clip a coupon »Clip this coupon for $10 off your next purchase.
»money-saving/money-off coupons
► (also coupon rate) FINANCE the rate of interest that is paid on a bond: »The bonds have a coupon of 6.25 per cent.
»a high-coupon/low-coupon bond
► FINANCE a part of a printed bond that can be separated from it when the bond's owner wants to be paid interest by the issuer (= organization from which it was bought): »The Securities of this series are issuable only in registered form without coupons in denominations of $1,000.
→ See also INTERNATIONAL REPLY COUPON(Cf. ↑international reply coupon), ZERO COUPON BOND(Cf. ↑zero coupon bond)
Financial and business terms. 2012.
