Par Value (Face Value)
The principal repaid at maturity, conventionally $1,000 per bond.
What is Par Value (Face Value)?
The amount the issuer repays at maturity and the base for coupon calculations. Bonds trade at a premium above par or a discount below it depending on how the coupon compares to prevailing rates.
Par Value (Face Value): a worked example
A bond quoted at 98 is trading at $980 - a discount to $1,000 par.
More terms in Securities & Instruments
Common Stock
An ownership share in a company, with voting rights and last claim on assets.
Preferred Stock
Equity with a fixed dividend and priority over common, usually without votes.
Bond
A loan to an issuer that pays interest and returns principal at maturity.
Coupon Rate
The bond's stated annual interest as a percentage of par.
Yield to Maturity (YTM)
The total annualized return if you buy today and hold to maturity.
Duration
A bond's price sensitivity to a 1% change in interest rates.
Credit Rating
An agency's assessment of an issuer's likelihood of default.
High-Yield (Junk) Bond
A below-investment-grade bond paying more to compensate for default risk.