An abbreviation for deferred-interest bond; a special type of deferred-coupon bond in which coupon interest is deferred for a specified period in the future. Typically, this bond is structured in a way that it doesn’t pay coupons for a given number of years (e.g., 3 or 5 years). However, at the end of the deferred-interest period, the bond begins to pay interest on a periodical basis (usually semiannually) until maturity date or call date.
Deferred-interest bonds sell originally like deep discount bonds, i.e., at a greater-than-usual discount to par value in order for DIBs to compensate bondholders for the no-interest period.
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