As far as I understand perpetual bonds are endless and don't mature. So why would anybody invest in one that does not yield? You don't know when/if they are going to pay.
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4Do you have an example of such a bond?– ChrisInEdmontonCommented Mar 5, 2016 at 14:13
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some perpetuals do get redeemed recently the UK retired some consols dating back to the Napoleonic wars.– PeponeCommented Mar 5, 2016 at 15:57
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@Pepone The Consols paid no interest?– Dilip SarwateCommented Mar 5, 2016 at 16:52
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@DilipSarwate no why would a bond not have a coupon– PeponeCommented Mar 5, 2016 at 17:14
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1@Pepone You seemed to be pointing out consols as examples of the perpetual no-coupon no-interest bonds that the OP was talking about, and saying that consols were redeemed recently– Dilip SarwateCommented Mar 5, 2016 at 18:09
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1 Answer
I've only heard of zero yield perpetual bond in the context of a trick interview question. They would ask how much would you pay for a perpetual zero coupon bond.
The idea is you would pay zero for it since you don't get any coupons, and you never get your money back.
