Strip Bond

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DEFINITION of 'Strip Bond'

A bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond."

INVESTOPEDIA EXPLAINS 'Strip Bond'

An investment firm will usually buy a debt instrument and "strip" it into its separate parts. Strip bonds usually trade at a discount and mature to par value.

RELATED TERMS
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  2. Semi-Annual Bond Basis - SABB

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  3. Zero-Coupon Bond

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  4. Coupon

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