What is the meaning of Bullet Bond?

Definition: A Bond that Amortizes (q. V.) fully on a single date. Its cash flows consist of regular coupon payments of interest and a final repayment of principal. Example: An ordinary, 30-year, noncallable Treasury bond with a semiannual coupon. Application: A' Bullet Bond' is a commonplace way of raising capital. Pricing: A Bullet Bond is a portfolio of Zero Coupon Bonds (q. V.), so its value is the value of the portfolio. Risk Management: A common way to measure a fixed income portfolio's risk is by its Duration (q. V.) or DV01 (q. V.), and its Convexity (q. V.). Consequently, one might combine a Bullet Bond with other fixed income instruments in a portfolio, in an effort to control the portfolio's Duration and Convexity. Comment: When a layman thinks of a bond, this is the bond.