Maturity date - date on which par amount is repaid 4. Coupon interest rate - stated or promised annual rate of interest on the bond.
Most bonds make semi-annual coupon payments.
The coupon payment in this case is the coupon rate x par amount 2. The coupon rate simply defines the bond's cash flows. As the name implies, these bonds have no coupon payments. They are created by investment banks who take government bonds and split the principal and interest into separate securities. Next we want to look at bond valuation.