Coupon underlying index

The coupon underlying Index is a benchmark or reference index used to determine the interest payments (coupon payments) on certain types of bonds. This index serves as the basis for calculating the coupon rate or interest rate that bondholders will receive. The performance of the underlying index typically influences the coupon payments on the bond.

For bonds linked to a specific index, such as equity-linked bonds or index-linked bonds, the coupon underlying index plays a crucial role in determining the interest payments. The coupon rate may be tied to the returns of the underlying index, which could be a stock market index, commodity index, interest rate index, or other financial benchmarks.

The coupon underlying index provides transparency and a standardized method for calculating interest payments based on market performance. Investors can track the movements of the underlying index to assess how it may impact the coupon payments on their bonds.