AD Blocker Detected

Ads can be a pain, but they are our only way to maintain the server. Please deactive Ads blocker to read the content. Your co-operation is highly appreciated and we hope our content is worth it.

Share This

Below par is a term used for bonds, where the current price is below the face value. Bond prices are usually quoted as a percentage of face value. So a par value below 100 means the bond is trading below par.

The par value for a bond reflects a pricing benchmarkt. A bond trading below par is considered trading at a discount, where its current yield is higher than its fixed coupon rate.

Bonds may trade below par when market interest rates have risen since it was issued (and the bond’s interest rate is lower), its credit rating was lowered, there are some problems with the issuer of the bond (competition, shifts in supply & demand, etc.). Usually, bonds trading at a discount involve higher risk.