The rate of interest paid on a fixed income investment or bond. Coupons can be paid annually, semi-annually or quarterly or as agreed in the terms of the security. The coupon rate can be fixed or floating for the term of the security. If it is a floating rate then it is likely that it will be linked to a benchmark such as the 90 day bank bill rate. The coupon rate is set by the issuer based on a number of factors including prevailing market interest rates and its credit rating. Fixed rate bonds in Australia predominantly pay a semi-annual coupon whereas floating rate bonds predominantly pay a quarterly coupon. Indexed linked bonds usually pay quarterly coupons .For example, a $500,000 bond with a fixed rate semi-annual coupon of 4% will pay two $10,000 coupons each year.
Follow us on TwitterTweets by @CurveSecurities
GIVE US A CALL
Ph (02) 9690 2188
1800 1 Curve (1800 128 783)
SEND US AN EMAIL
PAY US A VISIT
Level 2, 17 Randle St,
Surry Hills, NSW, 2010
Recent commentary by the Curve team
Curve Securities: We elevate performance
ABN 94 143 558 598
AFS Licence 405751
This website is not intended to imply a recommendation or otherwise constitute advice in relation to financial products. It does not take into account your investment objectives, financial situation or particular needs. Before acting on any information you obtain from this website you need to consider the appropriateness of the information in lieu of your investment objectives, financial situation or needs.
© 2018 Copyright – Curve Securities Australia