Coupon Rates in Green Bonds – Why It’s Called "Coupon"
Why it's called a "Coupon" instead of "Interest" or "Return" Coupon Rates: 1 Why it's called a "Coupon" instead of "Interest" or "Return" 1 1. Historical Reason – Physical Bond Certificates 1 2. Technical Usage in Finance 2 Example (Green Bond Context) 2 In Summary: 2 1. Definition of Coupon Rate in Green Bonds 3 2. How Coupon Rates Are Determined 3 3. Examples in India 3 4. Special Features 4 5. Greenium Effect 4 Conclusion 4 Coupon Rates: Coupon rates in Green Bonds refer to the periodic interest payments made to investors by the issuer, just like in traditional bonds. However, in the context of Green Bonds , coupon rates carry some unique considerations: Why it's called a "Coupon" instead of "Interest" or "Return" The term "coupon" has a historical origin and is still used in the bond market for very specific reasons: 1. Historical Reason – P...