What is the coupon binding?

coupon bonds are a type of bond problem that offers an advantage when receiving interest payments on a semi -annual basis. This is contrary to other types of problems with trading bonds, where interest payments can take place annually or in a biannal basis, or even delay until the bond has reached full maturity. With the coupon bond, interest payments are provided more often, while the nominal value of the bond pays at a time when the bond reaches maturity.

One obvious advantage of coupon bonds is that it helps to create a permanent source of income for bond holders during the calendar year. Depending on the structure of the actual bond problem, the amount or coupon of interest pay differs. Some tradable bonds of this type allow a fixed payment of the coupon, while others allow the payment of a variable coupon on the basis of a floating system of interest due to the moment.

Regarding the interest rate that can be obtained with a coupon bondEM, there is no regulation that forces a problem with coupon bonds at an interest rate above or below the rate applied to other types of bonds. However, it is not uncommon for the interest rate to be used slightly lower than other types of bonds, probably due to additional expenditures created by bond issuers due to more frequent interest payments.

as well as the wearer's link can be purchased by a coupon bond that is portable. However, if this type of measures could be an option for the future, it is necessary to pay attention to the choice of the problem with the coupon. In some cases, the transmission of coupon link to the new bond holder may cause a change in the way the interest due is calculated. There may also be a type of fees that either the buyer or the seller must have to be solved before the transfer.

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