About Bond

Some basic definitions first:


the date in the future on which the investor’s principal will be repaid

Face value/Par value/principle:

the amount of money a holder will get back once a bond matures.

Coupon/Interest rate:

the amount the bondholder will receive as interest payments.


yield shows the return you get on a bond.

yield = coupon amount/price, if the price is $1000, coupon rate is 10%, coupon amount is 100$, yield is 10%, but if price goes down to $800, coupon rate goes up to 12.5%

bond price goes up, yield goes down.

More complex def:

Yield To Maturity: yield that hold till the maturity

Bond yield:  bond discounted rate to the maturity

Par Yield:    coupon rate to the maturity


Column 1: Issuer – This is the company, state (or province) or country that is issuing the bond.
Column 2: Coupon – The coupon refers to the fixed interest rate that the issuer pays to the lender.
Column 3: Maturity Date This is the date on which the borrower will repay the investors their principal. Typically, only the last two digits of the year are quoted: 25 means 2025, 04 is 2004, etc.
Column 4: Bid Price – This is the price someone is willing to pay for the bond. It is quoted in relation to 100, no matter what the par value is. Think of the bid price as a percentage: a bond with a bid of 93 is trading at 93% of its par value.
Column 5: Yield – The yield indicates annual return until the bond matures. Usually, this is the yield to maturity, not current yield. If the bond is callable it will have a “c–” where the “–” is the year the bond can be called. For example, c10 means the bond can be called as early as 2010.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s