A bond that accrues interest. However, the accumulated interest is not paid out until the bond is sold (bond on which interest accrues but is not paid to the bondholder until maturity; that is: the interest is added back into the principal and further interest is calculated over the new, larger principal). – See accrual principle, annuity bond, duration, payment-in-kind bond, exchange bond, drawdown, savings premium bond, step-down bond.
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