A bond with a coupon – the interest rate on the bond – that is significantly lower than the market rate at the time of issuance. The difference between the market interest rate and the coupon is paid at maturity in the form of an additional amount. As a rule, the deep discounter – as the name suggests – is issued at an issue price well below one hundred percent. In mathematical terms, the issue price is roughly the value of the repayment amount and the individual coupons discounted at the market interest rate over the term.
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