Zero-Coupon Bond Index Nears Zero Bonds

A pillar of the 1980s leveraged-buyout boom is on the verge of extinction.

At the start of the year, just three companies remained in the ICE BofA U.S. High Yield Deferred Interest Bonds index, which tracks so-called zero-coupon corporate bonds from low-rated companies. Those are bonds that don’t make regular interest payments. Instead, investors buy them at a deep discount, receiving their full face value all at once when the bonds mature.

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