In the 1980s, a new type of bond appeared abroad. It was "zero coupon", that is, it had no coupons and no interest payments.

In fact, investors already receive interest when they purchase this bond. Zero-coupon bonds generally have longer maturities, up to 20 years. It is issued at a discount to the face value, and investors will be repaid the face value of the bond on the maturity date. For example, a 20-year bond with a face value of $20,000 may be worth only $6,000 when it is issued. There are special zero-coupon bonds operated by foreign brokerage companies. The brokerage company separates the coupon and principal and issues them independently. Merrill Lynch, Pierce and Fuller Smith, for example, created a zero-coupon bond that was guaranteed by the U.S. government, had principal and coupons separated, and was issued at a deep discount.