coupon stripping

coupon stripping definition - business

coupon stripping

The purchase of ordinary bonds (usually, U.S. Treasury bonds) that are then repackaged such that the receipts to interest and corpus payments are sold separately. The effect is to transform a security paying regular interest into zero-coupon receipts of varying maturities. Also called stripping. See also Separate Trading of Registered Interest and Principal of Securities.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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