Definitions for "Cushion Bond"
High coupon bond selling at prices above its call price.
bond trading at a higher dollar price than current coupon rates that is priced to the call and creates a substantially higher yield to maturity as compared to yield to call.  The bond “cushions” because the dollar value of one basis point (.01) priced to the call is less than if priced to maturity; therefore, the volatility is reduced.  See: Kicker Bond.
A callable bond that is not as sensitive to interest rate fluctuations because of its early call option.