Agio

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DEFINITION of 'Agio'

A description of the bond premium when the bond market value is greater than the par value. In international markets, agio can also sometimes refer to the fee paid for undertaking a transaction. Because these bonds are often traded on international markets, the agio premium is also used to describe the premium to exchange currencies.

INVESTOPEDIA EXPLAINS 'Agio'

As an example, if a bond was issued at 105%, then its agio would be 5%. Agio is typically an uncommon term for spread, and is not commonly used in Canada or the U.S.

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