Definition: Deep-discount bonds

Category: SNA 1993

Deep-discount bonds are bonds under which periodic cash flows are made that cover some of the interest liability during the life of the instrument but the amount is substantially below market interest; the difference between the discounted issue price and the price at maturity is substantial and, in the SNA, that difference is treated as interest and is recorded as accruing over the life of the bond rather than when due for payment. http://ec.europa.eu/eurostat/ramon/statmanuals/files/SNA_1993_EN.pdf