Par Value

Par value means the standard face value of a bond, usually the amount repaid at maturity. In simple terms, par value is the bond’s original repayment amount. Par value is important because investors use it to understand whether a bond is trading at a discount or premium. A bond trading at par is priced near its face value. For example, a bond with a par value of $1,000 trading at $1,000 is trading at par. Par value is not the same as the bond’s current market price. Market price can move above or below par depending on interest rates, credit risk, and demand.