A bond paying no interest but is bought at a lower price than its redemption value.

This means:
• that the rate of interest is 0%; or
• that the VAT rate is 0%. (But it could be raised from this level, if the Government wished to, without fresh legislation being needed.)
Zero−rate does not mean the same as exempt. If something is exempt from tax, no tax can be charged on it, unless the law is changed.

Glossary of Personal Financial Terms

AAA Rating

In short, AAA ratings (‘triple-A‘ ratings) are the highest credit rating available for an investment, such as a bond or company.

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

Similarly, the AA+ rating is issued by S&P (Standard and Poor) and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.