Bonds trade at a discount to par value for a number of reasons. Bonds on the secondary market with fixed coupons will trade at discounts when market interest rates rise. While the investor receives the same coupon, the bond is discounted to match prevailing market yields. Discounts also occur when bond supply exceeds demand, when the bond's credit rating is lowered, or when the perceived risk of default increases. Conversely, falling interest rates or an improved credit rating may cause a bond to trade at a premium.
Investment dictionary. Academic. 2012.
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bond discount — The difference by which a bond s market price is lower than its face value. The antithesis of a bond premium, which prevails when the market price of a bond is higher than its face value. Bloomberg Financial Dictionary See: original issue… … Financial and business terms
bond discount — Sale of bonds on the market at a price less than the face amount of such. Claussen s, Inc. v. U. S., C.A.Ga., 469 F.2d 340, 345. From the standpoint of the issuer of a bond at the issue date, is the excess of the par value of a bond over its… … Black's law dictionary
bond discount — noun A reduction from the face amount of a bond that occurs where bonds are sold on the market for cash at a price less than the face amount. Since bonds mature years after issue, they are discounted to reflect present value … Wiktionary
Unamortized Bond Discount — An accounting methodology for certain bonds. The unamortized bond discount is the difference between the par of a bond the value of the bond at maturity and the proceeds from the sale of the bond by the issuing company, less the portion that has… … Investment dictionary
unamortized bond discount — par value of a bond less the proceeds received from the sale of the bond, less whatever portion has been amortized. Bloomberg Financial Dictionary … Financial and business terms
unamortized bond discount — sconto non ammortizzato Lo sconto non ammortizzato è dato, nelle emissioni di titoli obbligazionari, dalla differenza tra il prezzo di rimborso e il prezzo ricavato dal collocamento presso gli investitori, al netto delle quote del prestito… … Glossario di economia e finanza
bond — 1 n 1 a: a usu. formal written agreement by which a person undertakes to perform a certain act (as appear in court or fulfill the obligations of a contract) or abstain from performing an act (as committing a crime) with the condition that failure … Law dictionary
discount bond — see bond 2 Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
discount — a deduction made from the normal cost or purchase price. Glossary of Business Terms 1) Quality differences between those standards set for some futures contracts and the quality of the delivered goods. If inferior goods are tendered for delivery … Financial and business terms
Discount — Referring to the selling price of a bond, a price below its par value. Related: premium. The New York Times Financial Glossary * * * ▪ I. discount dis‧count 1 [ˈdɪskaʊnt] noun [countable] 1. COMMERCE a reduction in the cost of goods or services… … Financial and business terms