Coupon bond is another name for a bearer bond in older accounting dictionaries: a bond not registered to any owner, with printed interest coupons attached that the holder cut off and presented for payment. In everyday modern usage it more often means any bond that pays interest at regular intervals.
From paper coupons to coupon rates
Historically, bearer bonds came with a sheet of dated coupons. Each time an interest payment fell due, the holder clipped the matching coupon and handed it to a paying bank. Since the issuer kept no record of owners, whoever held the certificate and its coupons was paid. This anonymity made them attractive for tax evasion, and US tax law changes in 1982 effectively ended new issuance of such bonds in the United States. Today almost all bonds are registered and held electronically.
The vocabulary survived. The annual interest a bond pays as a percentage of face value is still called its coupon rate, and each interest payment is still called a coupon. In this modern sense, a coupon bond is simply a bond that pays periodic interest, usually once or twice a year, and repays its face value at maturity.
The contrast is with a zero-coupon bond, which pays no periodic interest. It is sold at a discount to face value, and the investor's whole return comes from receiving the full face value at maturity.