Financial Quotient

What is a perpetual bond?

Perpetual bonds are typically issued by banks to increase their core capital.
Perpetual bonds are typically issued by banks to increase their core capital.ST PHOTO: GIN TAY

A perpetual bond is a fixed-income security with no maturity date. Theoretically, that means holders of the bond will receive interest payments forever.

This makes perpetual bonds similar to dividend-paying stocks.

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A version of this article appeared in the print edition of The Sunday Times on February 02, 2020, with the headline 'What is a perpetual bond?'. Print Edition | Subscribe