I'm new to bonds and have some very basic questions. Let's say there is a bond distributed by company A. The par value is $100/bond with a coupon rate of 5.35% (semi-annual distribution). The maturity date is 20 years from now.
From what I understand, this means that, if I were to purchase one bond from company A right now, I would receive in interest $5.35 at the end of every year (or $2.675 every six months) for twenty years, at the end which company A will return my original $100. All of this is guaranteed unless company A defaults on this bond. That's why bonds are known as conservative investments (safe with lower yield).
Correct me if I"m wrong here.
I know bond prices fluctuate. If I were to buy a single bond of company A at 90% par value, I would still get the 5.35% coupon rate, meaning I purchased this bond for $90, and my annual interest is still $5.35. I know the yield rate is a bit higher because that takes into account my lower purchase price compared to par value.
My question here is if I were to hold this to maturity, will company A pay me back my principal at par value ($100) or what I actually paid for (90% par = $90)?
Second, let's assume my bond becomes less and less valuable. I bought it at par value, but now the market price is 10% par (or $10) because other bonds are much more attractive. Is my coupon rate guaranteed regardless (5.35%) and I will still get my $100 back at maturity? But if I were to sell before the maturity date then I would only receive $10 correct (or whatever prevailing price on the date I sell)?
P.s. If I bought a single bond for 100% par at $100, and the commission is listed as 0.75%, what does that 0.75% mean? 0.75% of what? The principal and/or interest?