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I'm trying to understand bonds. I'm wondering if it is impossible to have a bond considered premium (or discount) if it is held for it's full maturity?

Ganesh Sittampalam
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skube
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1 Answers1

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If a bond is selling for more than its par value then it's sold at a premium. If it's sold for less then it's sold at a discount. Whether the holder intends to hold it to maturity or not is irrelevant.

If you're asking if a bond you already own can change from premium to discount (or vice-versa) then no, it matters what you bought it for. If you bought a bond for $102 and now it's selling for $98, you bought it at a premium, so any accounting or tax ramifications of buying a bond at a premium should stay in place.

Chris W. Rea
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D Stanley
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