A bond that does not provide for regular coupon payments during its term. Instead of coupon payments, the issue is made at a discount to the nominal value (100% at maturity). Such bonds have been issued on the American capital market since 1981, but are now also common on other important capital markets as a complement to interest-bearing bonds. Zero coupon bonds are often also referred to as zero bonds. More rarely, they are called zero-percent bonds or interest-free bonds.