A bond coupon payment refers to the periodic interest payment made to the bondholder by the issuer of a bond.
- Coupon payments are generally made semi-annually or annually and are specific to each bond. When you look up a bond, you’ll find this information under Coupon frequency, as well as the next interest payment date under Next Interest date.
- You’re eligible to receive the full coupon payment if you buy a bond before its record date. Record date is usually one day before the pay date. As the time for settlement needs to be taken into account as well, you need to buy a bond 3 days prior to the pay date and keep it at least until the record date, to be eligible to receive the coupon payment.
A bond repayment is when the issuer has to repay the bondholder the face value of the bond, once a bond reaches maturity. The face value does not include coupon payments.
- Please be aware that the coupon payment at the end of maturity happens separately from the repayment of the face value and might be made at a different date.