(plural zero coupon bonds)
- (finance) A bond (e.g., corporate debenture or government debt) that has no coupon (i.e., pays no interest), during the life of the issue. Such a bond is initially sold at a discount to its face value. The rate of return to the holder is derived from the gradual appreciation as the security moves toward maturity.
zero-coupon bond - Investment & Finance Definition
A bond that pays no interest until it matures. It is priced at a deep discount to make up for the lack of income. These bonds are commonly called zeros.