consol

n. Chiefly British
A government bond in Great Britain, originally issued in 1751, that pays perpetual interest and has no date of maturity. Often used in the plural. Also called bank annuity.

[Short for Consolidated Annuity.]

A bond with no maturity date. Perpetual bonds are not redeemable but pay a steady stream of interest forever. Some of the only notable perpetual bonds in existence are those that were issued by the British Treasury to pay off smaller issues used to finance the Napoleonic Wars (1814). Some in the U.S. believe it would be more efficient for the government to issue perpetual bonds, which may help it avoid the refinancing costs associated with bond issues that have maturity dates.

Investopedia Says:
Since perpetual bond payments are similar to stock dividend payments - as they both offer some sort of return for an indefinite period of time - it is logical that they would be priced the same way. The price of a perpetual bond is therefore the fixed interest payment, or coupon amount, divided by some constant discount rate, which represents the speed at which money loses value over time (partly because of inflation). The discount rate denominator reduces the real value of the nominally fixed coupon amounts over time, eventually making this value equal zero. As such, perpetual bonds, even though they pay interest forever, can be assigned a finite value, which in turn represents their price.

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Bond that has no maturity date, is not redeemable and pays a steady stream of interest indefinitely; also called annuity bond. The only notable perpetual bonds in existence are the consols first issued by the British Treasury to pay off smaller issues used to finance the Napoleonic Wars (1814). Some persons in the United States believe it would be more realistic to issue perpetual government bonds than constantly to refund portions of the national debt, as is the practice.

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