What is CUSHION BOND?

A CALLABLE BOND with a high COUPON that is selling for a PREMIUM. The cushion bond loses less value as rates rise and gains less value when rates fall when compared with a NONCALLABLE BOND.

More On This Topic



Link to This Definition
Did you find this definition of CUSHION BOND helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary