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step-up bond

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Financial Dictionary

Step-up Bond

A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.

Investopedia Commentary

In other words, the coupon "steps up". For example a five-year bond may pay a 4% coupon for the first two years of its life and a 6% coupon for the final three years.

Related Links

Bond Basics Tutorial
Advanced Bond Concepts
Asset Allocation within Fixed Income
The Basics Of The Bond Ladder

See also: Bond, Bond Ladder, Coupon, Coupon Bond, Fixed-Income Security, Sinking Fund

Also spelled: Stepup Bond, Step up Bond, steps up bond, steps up bonds

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