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Par

• (1) Price of 100%. (2) The principal amount at which the issuer of a debt security contracts to redeem that security at maturity, face value. A bond selling at par would have a market price equal to its par value or face value. In this case, the yield to maturity on the bond would equal to its coupon rate.

• Also known as Face Value, Principal, and Stated Value. (1)The face value of a bond-- generally $1,000 for corporate issues and higher denominations for many government issues. (2) A dollar amount assigned to a security when first issued. For stocks, par is usually a small dollar amount that bears no relationship to the security's market price. See also: Maturity Date.

 
 Embedded terms in definition
 Bond
Coupon rate
Coupon
Debt security
Debt
Face value of a bond
Face value
Issuer
Market
Maturity date
Maturity
Par value
Principal amount
Principal
Security
Stated value
Yield to maturity
Yield
 
 Referenced Terms
 Accretion of a discount: In portfolio accounting, a straight-line accumulation of capital gains on discount bonds in anticipation of receipt of Par at maturity.In portfolio accounting, a straight-line accumulation of capital gains on discount bond in anticipation of receipt of Par at maturity.

 Accretion of a discount: In portfolio accounting, a straight-line accumulation of capital gains on discount bonds in anticipation of receipt of Par at maturity.In portfolio accounting, a straight-line accumulation of capital gains on discount bond in anticipation of receipt of Par at maturity.

 Amortization: The systematic expensing of a portion of the cost of a fixed asset against sales revenue.(1) The paying off of debt in regular installments over a period of time. (2) The deduction of certain capital expenses over a specific period of time.The repayment of a loan by installments.Is the periodic pay down of principal. This is a common feature of most mortgages. Amortize also refers to the accounting write down or reduction in an intangible asset. This creates a charge against income. Amortization can also refer to the reduction in the cost basis of a bond purchased at a premium to Par. Sometimes, amortization is used as a synonym for depreciation or other write down of an asset or liability. In the later capacity it tends to apply to intangible assets. See Interest Impact on Installment to Amortize or Amortization.The process of reducing a debt through installment payments of principal and interest.

 Amortize: In portfolio accounting, periodic charges made against interest income on premium bonds in anticipation of receipt of the call price at call or of Par value at maturity. In the context of a loan, amortization means the annuity payments that pay off the loan in full.

 Bond: Long-term debt instrument used by business and government to raise large sums of money, generally from a diverse group of lenders. In the case of business bond issuers, a specific asset or assets are pledged as collateral.A bond is essentially a loan made by an investor to a division of the government, a government agency, or a corporation. The bond is a promissory note to repay the loan in full at the end of a fixed time period. The date on which the principal must be repaid is the called the maturity date, or maturity. In addition, the issuer of the bond, that is, the agency or corporation receiving the loan proceeds and issuing the promissory note, agrees to make regular payments of interest at a rate initially stated on the bond. Interest from bonds is taxable based on the type of bond. Corporate bonds are fully taxable, municipal bonds issued by state or local government agencies are free from federal income tax and usually free from taxes of the issuing jurisdiction, and Treasury bonds are subject to federal taxes but not state and local taxes. Bonds are rated according to many factors, including cost, degree of risk, and rate of income.A formal certificate of debt, issued by corporations or units of government.A legal obligation of an issuing company or government to repay the principal of a loan to bond investors at a specified future date. Bonds are usually issued with a Par or face value of $1,000, representing the amount of money borrowed. The issuer promises to pay a percentage of the par value as interest on the borrowed funds. The Interest payment is stated on the face of the bond at issue.Bonds are debt and are issued for a period of more than one year. The U.S. government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.The term bond refers to long-term debt of companies or governments.

 
 Related Terms
 Par bond
Par value
Par value stocks
Pull to par

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