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A coupon is the regular interest payment a bond issuer makes to the bondholder, calculated on the bond's face value.
The coupon is the regular interest payment that a bond's issuer makes to the holder. The coupon rate is set at issuance and refers to the bond's face value.
Example: a bond with a 1,000 EUR face value and a 3 % coupon pays 30 EUR in interest each year. The payment is made regardless of the bond's current market price.
Besides fixed-rate bonds, there are also floating-rate bonds (floaters), whose coupon is tied to a reference rate (for example Euribor).
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