1

After browsing an online broker's bonds offerings, I wanted to obtain some additional info on a particular bond. Specifically, its face value. I was expecting it to be listed on the broker (degiro), but I can't find it.

I also tried searching for it on isin.net, but it's not showing up there.

Where can I search for a bond's face value?

Improve this question
  • What do you need the face value for? Bonds are typically priced on a percentage of par (100) basis, so the face value is largely irrelevant. – D Stanley Jul 23 '18 at 20:03
  • I wanted to better understand, in absolute terms (ie, how much will I get paid), the expected returns from purchasing a particular bond. I may just need to do more research. – aryzing Jul 23 '18 at 20:48
  • 1
    Face value is the nominal value or dollar value of a security stated by the issuer. For stocks, it is the original cost of the stock shown on the certificate. For bonds, it is the amount paid to the holder at maturity, generally $1,000. It is also known as "par value" or simply "par." If you can't find it in the broker's online web site, contact them. – Bob Baerker Jul 24 '18 at 2:53
  • Thanks @BobBaerker, I emailed them and they confirmed that I have to rely on third party services to obtain it since they don't currently list it on their site. – aryzing Jul 24 '18 at 16:40
4

In the US, when you buy bonds you tell the broker that you want 1, 10, 32, 1000, or whatever you decide on. Those are $1000 bonds, i.e., each bond has a face value of $1000. So if you buy 32, the face value is $32,000. That's all there is to it.

One thing that makes it seem more complicated is that the price for the bond is quoted as a percentage of face value. So if you see price of 98, you'll pay $980 for each bond. If the price is 110, you'll pay $1100 for each one. So if you buy 32 bonds at 98, you'll pay $32,000 x .98, which is $31,360.

Well, not quite. You also pay accumulated interest. Bonds usually pay interest every 6 months. If the bond paid interest one month before you bought it, it has accumulated 1 month of interest, which is owed to the seller. The bond issuer doesn't deal with that: you do. You pay 1 month of interest to the seller, in addition to the purchase price. So if the bond you're buying has a coupon rate of 6%, that's 1/2% per month, and your 32 bonds, having a face value of $32,000, have accumulated $160 in interest. So the price you pay is $31,360 plus $160 plus whatever the broker charges for commission.

Improve this answer
  • Thanks for the detailed info. Being in Europe, I'm not sure that all bonds are at 1000 Eur. The exchange lists many at around 100 Eur (not 100 par). So I'm trying to figure out if instead they might be at 100 here instead. Which is why I was so interested in finding out the face value – aryzing Jul 24 '18 at 16:46

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.