Face value (bond)

the amount the bond's issuer is actually borrowing, and the amount due the bondholder when it's redeemed at maturity. Widely referred to as it "par" value, if the bond is purchased directly from the issuer this is commonly the price paid for the bond. In the secondary market, however, a bond's price is set by supply and demand, and will fluctuate with changing interest rates. If current interest rates are higher than the coupon rate on a bond, the bond may trade below face value (at a "discount"). If current interest rates have fallen, the price may be above face value (a "premium"). In either case the bond will be redeemed for par value at maturity.