discount bond investment & finance definition
A debt instrument, such as a Treasury bond, that has its coupon stripped away from the debt. Thus, no periodic interest is paid. It trades at a discount from its settlement value at maturity.
Discount bond
A bond that is purchased below face value(at a discount), and at the maturity date the face value is repaid. This type of bond does not make any interest payments; it just pays off the face value. Also called a zero-coupon bond.
Discount Bond
Bonds that are selling at a current price below its face value. Bonds sell at a discount when the coupon on the bond is lower than prevailing rates on similar investments.
Discount bond A bond that is selling at less than its par value.
Discount broker Brokerage house that executes trades at significantly lower commission rates than those charged by full-service brokerages.
Discount bond
One that sells at a current market price that is less than its face value. Bonds sell at a discount when the coupon on the bond is lower than prevailing rates. For example, you might have to pay only $812 for a bond with a 6.
Discount Bond
A bond selling below par, as interest in-lieu to the bondholders.
Diversification ...
Discount Bond A bond that sells at value below par value.
Discount Broker Brokerage services provided at a cost lower than full-service brokers.
Discount Bond
A bond selling below the face value amount; usually anything less than $1000 per bond.
Dollar Bond ...
Discount bond - A bond whose value is less than its face amount.
Discount broker - A stockbroker who charges a smaller commission than other brokers, but provides no counsel in investment ...
Discount bond
Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.
Discount broker
A brokerage house featuring relatively low commission rates in comparison to a full-service broker.
Deep discount bond
Deep discount bonds are originally issued with a par value, or face value, of $1,000. But they have declined in value by at least 20% -- to a market value of $800 or less -- typically because interest rates have increased.
MARKET DISCOUNT BOND - A bond purchased in the secondary market at a price that is less than the original issue price plus the accreted original issue discount, if any, through the date of purchase.
Discount Bond
Bond trading for less than its redemption value.
See: Deep Discount Bond
Discount Broker
A brokerage firm that executes buy and sell orders at lower commission rates than those charged by a full service broker.
Deep Discount Bond
It is loan instrument different from an ordinary debenture which is usually offered at its face value and earns periodic interest till redemption and is redeemed with or without premium.
Deep Discount Bond:
A bond issued at a very low issue price. Deep discounts have low coupons offering an investor high principal return and low interest income.
[TMAC] accretion of discount A straight-line accumulation of capital gains on discount bonds in anticipation of being paid par at maturity.
accrued market discount The increase in a Discount Bond.s market value due to its approaching maturity,... accumulated depreciation The net depreciation expense a producing asset has incurred to date. Also known...
The term accretive earnings is generally applied to the change in value of a discount bond as it nears its maturity date.
The tax treatment of original-issue-discount bonds is particularly complicated, so if you plan to invest in them, it is essential to consult your tax attorney or adviser.
One thing to be clear on is that while an accumulation bond is a discounted bond, it is not referred to as a discount bond. The concept behind a discount bond is very different.
Deductions for original issue discount bonds were limited to the amount the issuer would deduct as interest if it issued bonds with a face amount equivalent to the actual proceeds and paying the market rate of interest.
Accretion refers to the accumulation of capital gains in a discount bond as it approaches maturity and a value of par. While the gains are not received until the date of bond maturity, they are taxed by the IRS as annual income.
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The rise in The Market value of a Discount Bond as it approaches maturity (when it is Redeemable at par) and not because of falling market Interest rates.
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It turns out that the time-S value of the T-maturity discount bond has distribution (note the affine term structure here!)
where
Note that their terminal distribution for P(S,T) is distributed log-normally.
1. A bond that is trading below face value is a discount bond.
2. The amount a bond is below the face value is its discount.
3. Non-interest bearing securities such as treasury bills.
Accrued market discount
The rise in the market value of a discount bond as it approaches maturity (when it is redeemable at par) and not because of falling market interest rates.
T - Tailgating, Take Delivery, Takeover, Target Price, Tax - Exempt Bonds, Technical Analysis, Technical Correction, Term Discount Bonds, Term Shares, Thin Capitalization, Tiger Markets, Turnkey Project, Turnover, Two - Tier Tender Offer. .....
See Market Discount Bonds under Discount on Debt Instruments, later. If you do not make that choice, or if you bought the bond before May 1, 1993, any gain from market discount is taxable when you dispose of the bond.
Accumulation Bond
A bond sold at a price below its face value and can be redeemed at its face value when matured. Also called discount bond.
a new car purchased at $20,000 depreciates to $5,000 in five years discount bond: A bond whose value is less than its face amount discount broker: A stockbroker who charges a smaller commission than other brokers, ...
Original Issue Discount (OID) An original issue discount bond is a bond issued at a price below par value. A zero-coupon bond is an example of an OID.
 See also: Discount, Bond, Interest, Maturity, Bonds
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