Fixed Income

Zero-Coupon Bond

Definition

What is Zero-Coupon Bond?

A bond that pays no periodic coupon and is issued or traded below the amount repaid at maturity.

Example in practice

An investor pays ₦70,000 today and receives ₦100,000 at maturity.

Keep learning

A debt security through which an investor lends money to an issuer in return for promised payments.

The government, company, or organisation that creates and sells a security.

The principal amount stated on a bond and usually repaid at maturity.

A short-term government debt instrument usually issued at a discount and repaid at face value.

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