Par Value

Par Value refers to the nominal or Face Value of a security stated by the issuer. For Bonds, it is the amount paid back to the bondholder at maturity, while for Stocks, it is the minimum price at which Shares can be issued.

For example, if a bond has a par value of $1,000, the issuer will repay this amount at maturity regardless of the bond’s market value. If a company’s Stock has a par value of $0.01 per Share, it cannot issue Shares for less than this amount.

In cases of bond trading, if a bond is sold at par value, it means it is bEINg sold at its Face Value. Conversely, a bond sold at a premium is above par value, while one sold at a discount is below par value.