InvestorWords.com
cushion bond
Definition
A fixed income security offering investors a high coupon payment that does not see as much of a decline in price due to rising interest rates than other bonds experience, and does not see as much of a price increase due to falling interest rates. A cushion bond sells at a premium. "Cushion" refers to the soft landing that the bond experiences during interest rate fluctuations.
Recommended Articles from InvestorGuide.com
Related Videos
Featured Advertiser
Get our free Term of the Day newsletter!



