Coupon Bond Law and Legal Definition

Coupon Bond is a bond with interest coupons attached. Each coupon represents a single interest payment. It is an unregistered, negotiable bond on which interest and principal are payable to the holder, regardless of whom it was originally issued to. The holder submits a coupon, usually semi-annually, to the issuer or paying agent to receive payment. Coupon bonds are being phased out in favor of registered bonds.