Differentiate the bond issued at a premium and bond issued at a discount. Tell me when do they issued both of it.
Thank You and God Bless =)
I mean, when do you issue these bonds?
Differentiate the bond issued at a premium and bond issued at a discount. Tell me when do they issued both of it.
Thank You and God Bless =)
I mean, when do you issue these bonds?
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#1 by mbrcatz on September 6, 2010 - 9:58 pm
You’re talking about investment bonds, not insurance bonds. Wrong category.
#2 by fladabosco on September 6, 2010 - 9:58 pm
The bonds are issued whenever the issuing body wants to issue them. They are discounted, sold at a premium or at par depending on how the issuing body prices them and how the market values them.
If the company is in trouble and has to accept less than par (face value of the bond) then it sells the bond for a discount. If the bonds are in demand and the seller can command a price higher than par, it sells for a premium.
Widgetcorp issues a $10,000 bond. If the bond sells for less than $10,000 it has sold at a discount. If it sells for $10,000 then it sells for par and if it is over $10,000 then it sells at a premium. The coupon, or interest rate doesn’t matter.