Bond Discount – Florida Bond Investment Breach of Fiduciary Duty, Breach of Contract and Negligence FINRA Arbitration and State and Federal Litigation Attorney:

A bond discount is the amount by which the market price of a bond is lower than its face value.  Outstanding bonds with fixed coupons go to discounts when market interest rates rise.  Discounts are also caused when supply exceeds demand and when a bond’s credit rating is reduced.  When opposite conditions exist and market price is higher than face value, the difference is termed a bond premium.  Premiums also occur when a bond issue with a call feature is redeemed prior to maturity and the condholder is compensated for lost interest.

Please keep in mind that the information provided in this post is for educational purposes only.  It is not designed to be complete in all material respects.  Thus, it should not be relied upon as legal or investment advice.  If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

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