I have a question about this bond:


If you look to the right, you can see it lists an issue price of 98.69. Now my question is usually most bonds are issued at 100, and when the bond matures, 100 is paid back to bondholders.

If this bond in particular has an issue price of 98.69, does it mean at maturity the bondholders will get back 98.69?

Also why would a bond be issued at less than 100 if that is the norm for the vast majority of bonds? After all it is the secondary market that decides the prevailing market price.

Thank you.

2 Answers 2


Easy answer first, 100 is paid back at maturity.

The reason it is issued at another price than 100 is market circumstances and market interest in the bond. Typically bonds are issues at "nice" rates of interest, say 2.50%. The market may trade at 2.56% however and thus the bond should be priced below par. Also, bonds are announced first and then parties can subscribe to the bond at a price of their choice. In the end the agent acting for the issuer will select how much will be issued and at what price. Another method is issuing through trading them (the issuer just starts selling the bonds), but in that case the issue price would be different for each trade.

Typically the issue price is a bit below 100 in most cases. Probably some psychological choice so that you get back more than you paid.


A $100 bond issued at a price below $100 is probably a zero coupon bond. This discount is the imputed interest.

If a bond issued at $100 trades below $100, it's likely that rates interest rates have risen and the bond's price has dropped in order to provide a yield similar to current rates.

  • OP is talking about an issue price of 98.69. Unless the interest rates are really low or the term to maturity is short that is not a realistic price for a zero coupon bond. Of course we've had negative interest rates on government bonds in Europe recently (even 10yr bonds) but since the current environment is not like that, let's assume that it's not a zero coupon. Jan 23 at 20:27

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