What is typically a characteristic of a split coupon bond?

A split coupon bond is distinguished by its phased interest payments, which means that it pays interest at different rates during different periods of its life. Typically, these bonds may offer a lower initial coupon rate for a specific period, which may be followed by higher coupon payments later on. This structure allows issuers to manage cash flow more effectively, making it appealing for certain financial strategies or market conditions.

In contrast, other characteristics such as consistent interest payments or no interest at all do not align with the nature of split coupon bonds. Consistent interest payments suggest a stable and fixed return, which does not reflect the phased nature of split coupon structures. Additionally, while some bonds do come with no interest payments, known as zero-coupon bonds, split coupon bonds do provide interest, albeit at varying rates throughout their lifecycle. Thus, phased interest payments accurately capture the essence of what makes a split coupon bond unique.