I'm looking at investing in bonds, what is the coupon rate?

Last Updated: 18 Dec 2015

The coupon rate is the original interest rate the issuer agreed to pay to investors and is fixed at the date the bond is first issued. This is payable half yearly or quarterly in arrears by the share registry (in New Zealand, the two main Registries are Link Market Services and Computershare) and can be mailed directly to the registered owner or direct credited to the registered owner's bank account.

This is not necessarily the return you receive on your investment. The return you receive ('yield to maturity') is determined by the premium, or discount to face value that you pay for a specified parcel of bonds.

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