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Par value

Also known as face value, the principal amount of a bond. Debt securities are usually issued at par. However, they may be issued at a premium or discount to par. For example, an investor could expect to pay a steep discount for a zero-coupon bond. When bonds are traded in the secondary market, they usually change hands for more or less than the par value, reflecting their market value based on prevailing interest rates and the credit risk of the issuer.

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