Bonds can also be issued in the open market like stocks. Bonds generally stipulate the par value and coupon rate, but when they are issued, they are not issued at par value, but in at discount. So what does at discount mean?

What does bond discount mean?

Bond discount refers to issuing bonds to the market at a price lower than the face value of bonds. The advantage of discount is that investors can get higher rate of return. For example, a one-year bond with a face value of 65,438+000 yuan and 2% in coupon rate is issued in 99 yuan at a discount. At the maturity of one year, the sum of the actually paid principal and interest is 102 yuan, the actual income is 3 yuan, and the actual rate of return is 3/99=3.03%.

So, why are bonds discounted? On the surface, investors' enthusiasm for bonds is not high, and it is necessary to increase the real rate of return by discounting. The deeper reason may be that the financial situation of bond issuers is getting worse, or similar products in the market have higher returns.

This is the discount bond. If you want to know more, please pay attention.