Par

Definition:

Usually referring to the stated or face value of a bond or the initial price given to a security. For Common Stock, Par is the nominal amount assigned to the share by the issuer, and is distinguishable from the actual market value of the stock. For bonds, Par is the principal amount repaid to the holder on Maturity. In the Secondary Market, if Interest Rates are higher than the Coupon of the bond, then the bond is sold below Par, or at a discount, and if Interest Rates are lower than the Coupon, then the bond is sold above Par, that is at a premium.

Return to Glossary