The first characteristic of a bond is its face, or par value. This
represents the amount of principal that a bondholder will receive at maturity, and is
also the value that that a bond is issued for at the time that a company or government
first sells them. The majority of corporate bonds today carry a face value of $1,000, but
may vary by issuer
The Market Value:
Although a bond may have a face value of $1000, it may not sell at
$1000 in the bond market. If the issuing company is not doing well financially, its bonds
may sell for less than $1000, perhaps at $950; the bond is selling at a discount. If the
market value of the bond is more than $1,000, and then it is selling at a premium . A
bond, which is priced at its face value, is selling at par.
A bond’s coupon rate is the amount of interest income it earns each year
based on its face value.