COUPON Definition & Legal Meaning
This entry gives the coupon definition and legal meaning. It also links to Black’s Law dictionary fourth edition.
Coupon definition in plain terms
The periodic CASH FLOW payable by an issuer or borrower to an investor or lender for the use of DEBTbased CAPITAL. Coupon payments may be based on fixed or floating INTEREST RATES, and may be payable on a weekly, monthly, quarterly, semiannual or annual basis, or accrued until final maturity of the LIABILITY. See also CORPUS, PRINCIPAL. STRIPPING See STRIPPING.
About this coupon definition
The entry describes a coupon as the periodic cash flow payable by an issuer or borrower to an investor or lender. The payment is for the use of debt-based capital. Coupon payments may be based on fixed or floating interest rates. They may be payable on a weekly, monthly, quarterly, semiannual or annual basis. They may also be accrued until final maturity of the liability.
The entry also gives a second meaning. A coupon is a statement of due interest to be cut from a debt instrument, and especially a bearer bond, when payable and presented for payment. Learn more about the term on Wikipedia.
Key takeaways
- A coupon is the periodic cash flow payable by an issuer or borrower to an investor or lender.
- The payments may be based on fixed or floating interest rates.
- They may be payable weekly, monthly, quarterly, semiannually or annually, or accrued until final maturity.
- The entry also points to the related terms corpus and principal.
- A second meaning is a statement of due interest cut from a debt instrument.
Related reading on Creative Geniusess
- The Dichotomy of Public Debt and Private Credit looks at financial obligations.
- What is U.S. Currency? covers the Emergency Banking Act and HJR 192.
- 1099-A: Acquisition or Abandonment of Secured Property discusses money, credit and promises in the United States.
- What is a Fiscal Year VS a Calendar Year? explains fiscal years as twelve-month periods.
