Sterling Transferable Accruing Government Securities (S.T.A.G.S.)
Sterling bonds which are a repackaging of gilt-edged government stock. The dealer, having acquired gilt-edged stock, issues the capital part in zero-interest bonds. The purchaser can therefore acquire parcels of stock with a fixed maturity date. By forgoing the annual income on the stock, he obtains an interest in the capital value at a price much lower than that obtaining on the current gilt-edge market. These bonds are aimed at investors solely concerned with capital gain and are new to the U.K. market.
Reference: The Penguin Business Dictionary, 3rd edt.