Short Coupon

[short KOO-puhn]

What is the definition of Short Coupon?

A bond interest payment that covers a period less than the conventional six-month period.

Using Short Coupon in an Example

A short coupon typically occurs when a bond is issued mid-period and the first interest payment is due before the next regular payment date, resulting in a shorter payment period and a proportionally smaller interest payment.

Using Short Coupon in a sentence

The bond's first payment involved a short coupon because it was issued just three months before the scheduled semi-annual interest payment date.

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