Key Components of Bonds

1. Face Value (Par Value): Face value, or par value, is the amount the issuer promises to pay the bondholder at maturity. It is usually issued in denominations of $1,000 but may be other denominations. This value is critical when computing coupon payments for bonds and the return the investor will get if he or she holds the bond until its maturity. 2. Coupon Rate: The coupon rate is the rate of interest the issuer agrees to pay to the bondholder, expressed usually as a percent of the face value.