Listen to a Business English Dialogue About Coupon bond
Martin: Hey Mary, do you know what a coupon bond is?
Mary: Hi Martin, yes, a coupon bond is a type of debt security that pays periodic interest payments, known as coupons, to the bondholder.
Martin: Right, and at maturity, the bondholder receives the face value of the bond. Coupon bonds are commonly used by corporations and governments to raise capital. Do you know how the coupon rate is determined?
Mary: Yes, the coupon rate is set at the time the bond is issued and is based on factors such as prevailing interest rates, the issuer’s creditworthiness, and market conditions.
Martin: That’s correct. Higher coupon rates are typically offered on bonds with higher perceived risk, while bonds issued by stable entities often have lower coupon rates. Have you ever invested in coupon bonds?