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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Principal-Only

Definition:

Think of a bond as having two parts:

  • the principal that will be paid on the maturity date
  • the interest that's paid in coupon payments regularly

Usually, it's all tied up in a pretty package, but you can separate the two and sell the bond without the coupon payments as principal-only.