Strip Bond
A bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond." Investopedia Says:
An investment firm will usually buy a debt instrument and "strip" it into its separate parts. Strip bonds usually trade at a discount and mature to par value. Related Terms:
Bond
Coupon
Debt
Par Value
Principal
Zero-Coupon Bond |