Base payment

The term for the initial base amount (typically with an indexed linked bond) where the value rises and falls according to changes in CPI. For example, a capital indexed bond might have a base payment of 100 in year one and a coupon of 4% If, over year one, the CPI increases by 10%, then the base payment would rise from 100 to 110, so that coupon payment would also rise from 4% to 110% of 4%, or 44%.

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