The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

ACCRUAL BOND Definition & Legal Meaning

Definition & Citations:

(1) A TRANCHE of a COLLATERALIZED MORTGAGE OBLIGATION that pays no COUPON interest or PRINCIPAL until all other tranches have been redeemed; this protects investors holding other tranches from PREPAYMENTS. The accrual bond is similar to a zero coupon bond but carries an explicit coupon rate and may ultimately pay both principal and coupons prior to final maturity. (2) A ZERO COUPON BOND. (1) Also known as ZBOND.ACCRUAL NOTE See RANGE FLOATER NOTE.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.