In the context of securitisations, a bullet refers to a
bond that does not make any
principal payments until maturity. All of the interest payments are made on a regular basis, but the principal is only repaid at the end of the bond's term.
Bullets are often used in securitisations because they can be structured to have a lower interest rate than other types of bonds. This is because investors are willing to accept a lower interest rate in exchange for the certainty of receiving their principal back at
maturity.