The increase in a bond’s value as it approaches maturity.
Description
Accretion refers to the gradual increase in a discounted bond’s value as it nears maturity, converging to its face value, used by family offices in fixed-income strategies. It generates capital gains for bonds bought below par, complementing interest income. Tax implications, like imputed interest, require planning. Accretion is key for zero-coupon or distressed bond investments.
