Bond that does not pay interest coupons (zero-coupon bond). Instead of periodic interest payments, the difference between the redemption price and the issue price is the yield to maturity. Accordingly, the investor receives only one payment: the amount realized in the case of a premature sale or the amount redeemed at maturity. In general, zero-coupon bonds are issued at a substantial discount (differential) and redeemed at maturity at a price of 100% (at par). Depending on the term, creditworthiness of the borrower and capital market rates, the issue price may be slightly or significantly below the redemption price.