<p>If I understand you correctly, the bond pays out nothing whatsoever. Such a bond must be worthless. The value of the bond is equal to the net present value, i.e. the sum of the discounted value of all future cash flows, which are zero in your case. If the government would buy it back, it would necessarily buy it back at a price of zero. Therefore, the bond will remain worthless in any case.</p>

CC BY-SA 4.0
2018-12-16T12:52:06.313Z
2018-12-16T12:52:06.313Z
BB King
<p>A government issues perpetual bonds with no interest payments, no coupons: Most economists that are not hyper-dovish would argue such a bond is intrinsically worthless. However, if a government were desperate for some form of credit in regard to these instruments, wouldn’t there be some probability of the government buying these instruments back and thus granting them value?</p>

CC BY-SA 4.0
2018-12-16T16:41:22.223Z
Welcome to the site.  Is this question purely hypothetical, or do you know of a government that has issued a zero-coupon perpetual bond?
Adam Bailey
<bonds>
Isn’t a zero-coupon perpetual bond not worthless if the relevant government has some probability of buying them back?
Larry Gruene
# Isn’t a zero-coupon perpetual bond not worthless if the relevant government has some probability of buying them back?

(Asked by: username_0 on 2018-12-16)

A government issues perpetual bonds with no interest payments, no coupons: Most economists that are not hyper-dovish would argue such a bond is intrinsically worthless. However, if a government were desperate for some form of credit in regard to these instruments, wouldn’t there be some probability of the government buying these instruments back and thus granting them value?

**Tags:** bonds
> **Comments:**
> **username_1**: Welcome to the site.  Is this question purely hypothetical, or do you know of a government that has issued a zero-coupon perpetual bond?  

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## 1 answers

### Answer by username_2 on 2018-12-16. Score: 2

If I understand you correctly, the bond pays out nothing whatsoever. Such a bond must be worthless. The value of the bond is equal to the net present value, i.e. the sum of the discounted value of all future cash flows, which are zero in your case. If the government would buy it back, it would necessarily buy it back at a price of zero. Therefore, the bond will remain worthless in any case.


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