|
The nominal value
of a bond is the par or face value and sometimes, also referred to as the
principal value of the bond. This is the amount the issuer of the bond has
agreed to pay the bondholder at the maturity date. In view of this, the
principal is also called the redemption or maturity value.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
|
