Bullet Bond
Definition
What is Bullet Bond?
A bond that repays all principalThe original amount of money invested or lent, excluding later returns. at final maturityThe date when a debt investment's principal is scheduled to be repaid. rather than through scheduled amortisationThe systematic allocation of an intangible asset's cost over its useful life..
Example in practice
How This Looks in Practice
The five-year bullet bond returns the full face valueThe principal amount stated on a bond and usually repaid at maturity. in year five.
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Related Terms
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.