If a Bond is Sold at a discount...do issuers still pay the full face value at maturity date?

let say a $1,000 bond was sold at a discount for $970....Do issuers pay back at maturity date $970 or $1,000?

When bonds are sold at a discount...does it decrease in value?

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  • Anonymous
    8 years ago
    Best Answer

    If you sold a Bond ...before... the maturity date,..It would sell at a Discount or Premium depending where Interest rates are...

    In the 80's Interest Rates were at a high of 14%,..and within 5 years was at 7%

    Some Bonds sell at a Discount Price from their face value...You Paid $25 for a $100 War bond(1960'sMaturity7-10 years?)..

  • 8 years ago

    At maturity ( or in the event of a callable bond, at call ) the issue is obliged to pay the full face value of the bond. In this case, $1,000.

    The instantaneous value of the bond will fluctuate based on market conditions. If prevailing interest rates are low, bonds may trade at a premium; conversely when rates are high bonds will trade at a discount. This results in an "Effective yield" that is in line with the prevailing interest rate.

    Bear in mind that the bond market is illiquid compared with the stock market, and spreads and commissions could be high - very high.

  • Raysor
    Lv 7
    8 years ago

    The face value is paid(redeemed) at maturity. I am not sure a bond would be issued at a discount, apart from government bonds which are issued to special discount houses. A bond will normally be issued at par (and it will either be oversubscribed or under subscribed)

  • 8 years ago

    At maturity, you will get the $1,000.

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  • 8 years ago

    You get the $1,000 back.

    I know this.

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