Key Features of a Bond

What are the key features of a bond?

The bond key features include maturity, par value, currency denomination, coupon rate and issue date. Maturity refers to the time when the bond matures and the last payment of interest and principal is made to the holders. Per value also referred to as redemption, principle, maturity, or face value refers to the dollar amount to be received by the holder at the maturity of the bond.  Although it can be any amount, it is characteristically $1000 for every bond. Coupon rate gives the interest rate to be paid by the bond to the holders every year. To obtain the dollar value of coupon one need to multiply per value by the coupon rate. Currency denomination shows the currency in which the principle and interest will be paid in which can either be dollar or non-dollar. Issue date refers to the actual date of issuing the bonds (Petty et al., 2015).

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