FIN 300 Chapter Notes - Chapter 6: Notional Amount, Sherritt International, High-Yield Debt
Document Summary
Bond indenture: statement of the terms of a bond, as well as the amounts and dates of all payments to be made. Maturity date: final repayment of a bond. Term: time remaining until the final repayment date of a bond. Face value or par value: notional amount of a bond paid to the holder at maturity; also called the principal amount: repaid at maturity, generally denominated in standard increments such as . Coupons: promised interest payments of a bond, paid periodically until the maturity date of the bond: bond indenture typically specifies that the coupons will be paid periodically (eg. semi-annually) until the maturity date of the bond. Coupon rate: rate that determines the amount of each coupon payment of a bond. Indicates the percentage of the face value paid out as coupons each year. Eg. a bond with a 10% coupon rate and semi-annual payments will pay coupon payments of x.
