Face Value (Par Value)
Valeur nominale in French
Quick definition
Face value, also called par value, is the amount a bond's issuer repays at maturity and the base on which coupon payments are calculated. It is set at issue, usually $1,000 per bond, and it never changes.
The anchor of every bond calculation
Face value is the contractual amount a bond promises to repay on its maturity date. It is also the base for the interest: a coupon rate is always a percentage of face value, so a 4% coupon on $10,000 of face value pays $400 a year no matter what you paid for the bonds. Prices, yields and market moods all swirl around it, but the face value itself is fixed the day the bond is born.
Denominations and the per-100 quote
Canadian bonds come in standard $1,000 denominations, and dealers typically sell them in blocks of $5,000 face value or more. Prices, though, are quoted per $100 of face value: a quote of 98.50 on $10,000 of face value means the bonds cost $9,850. That quote is the clean price; what you actually pay at settlement adds accrued interest, as explained in clean price vs dirty price.
At par, above par, below par
A bond trading at exactly 100 trades at par: price equals face value. Above 100 it trades at a premium, below 100 at a discount, and the reasons a bond drifts away from par, along with the tax consequences, are covered in premium and discount bonds.
Three numbers that are not the same
Face value is routinely confused with two other numbers attached to the same bond:
- Face value: what the issuer repays at maturity, fixed forever.
- Price: what you pay to buy the bond today, moves with interest rates every day.
- Market value: what your position is worth right now, the current price applied to the face value you hold.
In Canada
The per-100 quoting convention is universal across Government of Canada, provincial and corporate bonds, which makes bonds of any size instantly comparable: 98.50 means the same relative discount whether you hold $5,000 or $5 million of face value. Our Bond Calculator works the same way, taking a price per $100 and scaling it to whatever face value you enter.
Worked example
You buy $10,000 face value of a bond with a 4% coupon at a quoted price of 98.50, paying $9,850 plus accrued interest. Your coupons are calculated on the face value: $400 a year, regardless of the $9,850 you paid.
At maturity the issuer repays the full $10,000. The $150 gap between your purchase price and face value is part of your return, on top of every coupon collected along the way.
Related terms
Reviewed by Alexandre Bernier, CFP®, CIM®, PFP®·Updated July 2026