Face value (par value)

What is face value

Face value (par value) is the fixed nominal amount printed on a bond or share by the issuer, which does not change with the market price.

For a bond, face value is the amount the issuer promises to repay at maturity, and the base on which coupon interest is calculated. For a share, face value is a legal accounting figure used to record share capital. It usually has little to do with what the share trades for.

Worked example (hypothetical)

Take a hypothetical bond with face value F and an annual coupon rate c.

• Each year, the holder receives a coupon of c × F. The payment is based on face value, not on the price the holder paid.
• If the bond trades at a price P below F, it trades "at a discount". If P is above F, it trades "at a premium". If P equals F, it trades "at par".
• At maturity, the holder receives F, whatever price they paid. A buyer who paid less than F gains the difference. A buyer who paid more loses the difference.

Market interest rates move bond prices around par. When rates rise, existing fixed-coupon bonds usually fall below par. An example of such a rate change is this central bank decision: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC).

Formal definition and edge cases

• Bond principal: face value is the principal amount of the debt. Bond prices are often quoted as a percentage of face value. Accrued interest is also calculated on face value.
• Zero-coupon bonds pay no coupon. They are issued below face value and redeemed at face value, so the whole return is the gap between the two.
• Amortising bonds repay principal in parts over time, so the outstanding amount falls below the original face value. See amortization.
• Inflation-linked bonds adjust the principal with an index. The amount repaid can differ from the original face value.
• Shares issued above par: the excess over face value is booked separately, often as share premium. A stock split reduces face value per share and increases the share count.
• No-par shares: some jurisdictions allow shares with no face value at all.
• Dividends as a percentage: some companies announce dividends as a percentage of face value. That percentage is not the dividend yield on the market price.

Where you see the term

• Bond term sheets and government securities auction results, where amounts are stated in face value. See bond auction.
• Company annual reports, in the share capital note: authorised and issued shares and their face value.
• Stock exchange announcements about dividends, splits and rights issues.
• News about bonds trading "below par" or "above par".

Face value is a feature of the bond or share itself. A CFD that tracks a price has no face value. Leveraged CFD trading can lose money fast.

Related terms

• Coupon (bond)
• Bond duration
• Credit spread
• Default
• Eurobond
• Book value
• Basis point
• Future and present value
• Ex-dividend and record date
• Trading glossary
• Saving, Investing, Loans

Frequent questions

What is the face value of a share?

It is the nominal amount per share stated in the company's documents and used to record share capital. The market price is usually far from it.

Is face value the same as market value?

No. Face value is fixed by the issuer. Market value is the current trading price, which moves with supply, demand and interest rates.

Is par value meaning different from face value?

No. The two names refer to the same nominal amount.

Why does a bond trade below par?

Usually because market rates are above its coupon rate, or because investors see higher credit risk. Either way, buyers pay less than face value to get a market return.

Do I get face value back at maturity?

For a standard bond, the issuer repays face value at maturity unless it defaults. The exact terms are set in the bond's documentation.