The sustainable investor for a changing world

Financial glossary



The z-spread measures the flat spread over a benchmark yield curve that investors require to lend money to an issuer. The z-spread is often used to compare bonds from different maturities and different currencies.


Zero Coupon Bond

A zero coupon bond is a bond which capitalises interest instead of distributing coupons. Such bonds are then issued at a discount to their face value. While short-term debt securities are often zero coupons, longer maturity bonds generally involve regular interest payments. Longer term zero coupon bonds can, however, be constructed from any bond by separating its interest and principal payments to form two distinct instruments (a method called STRIPS ).

© 2021 BNP PARIBAS ASSET MANAGEMENT USA, Inc., All rights reserved.
BNP PARIBAS ASSET MANAGEMENT USA, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended.
These documents and video clips may also include information obtained from affiliated investment management companies within BNP Paribas Asset Management, the brand name of the BNP Paribas group’s asset management services. The documents and video clips are produced for informational purposes only and do not constitute: 1. an offer to buy nor a solicitation to sell, nor shall they form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. investment advice. Any opinions included in these documents and video clips constitute the judgment of the author/ presenter at the time specified and may be subject to change without notice.