cushion bond

cushion bond definition - business

cushion bond

A high-coupon bond that sells at a price only slightly above par because of a call provision permitting the issuer to repurchase the security near its current price. A cushion bond has an unusually high current yield, little chance for a price rise, and considerable protection against falling prices caused by increased interest rates.

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.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.