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DEEP-DISCOUNT BONDS

Statistics Directorate    
French Equivalent: Obligations à prime d’émission élevée

Definition:
Deep-discount bonds are bonds under which periodic cash flows are made that cover some of the interest liability during the life of the instrument but the amount is substantially below market interest.

The difference between the discounted issue price and the price at maturity is substantial and, in the SNA, that difference is treated as interest and is recorded as accruing over the life of the bond rather than when due for payment.

Context:
A bond with issue price significantly below maturity price because of a lack of coupon or a coupon below market rate (Coordinated Portfolio Investment Survey Guide, Second Edition, International Monetary Fund, 2002, Washington DC. Appendix VI: Definition and Description of Instruments. Available at: http://www.imf.org/external/pubs/ft/cpis/2002/pdf/cpis_index.pdf).

Source Publication:
SNA 11.77.

Hyperlink:
http://esa.un.org/unsd/sna1993/introduction.asp

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Monday, March 03, 2003