Unamortized Bond Premium

AAA

DEFINITION of 'Unamortized Bond Premium'

The difference between the par-value or face-value of a bond and the price above this face value, at which the bond has been issued. Unamortized bond premiums do not include any interest that has been amortized or written off.


Also referred to as the amount between the face value and the amount the bond was sold at, minus the interest expense.

INVESTOPEDIA EXPLAINS 'Unamortized Bond Premium'

Referred to as part of the bond premium that will be amortized (written off) in the future. A bond premium is a bond that is priced higher than its face value. The amortized amount of this bond is credited as an interest expense. The bondholder amortizes the bond to figure out the value of the interest rate, minus the coupon rate.

RELATED TERMS
  1. Agio

    A description of the bond premium when the bond market value ...
  2. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  3. Bond

    A debt investment in which an investor loans money to an entity ...
  4. Premium Bond

    1) A bond that is trading above its par value. A bond will trade ...
  5. Amortizable Bond Premium

    A tax term referring to the excess premium paid over and above ...
  6. Surrender Period

    The amount of time an investor must wait until he or she can ...
Related Articles
  1. Basics Of Federal Bond Issues
    Bonds & Fixed Income

    Basics Of Federal Bond Issues

  2. The Advantages Of Bonds
    Investing

    The Advantages Of Bonds

  3. The Basics Of Municipal Bonds
    Bonds & Fixed Income

    The Basics Of Municipal Bonds

  4. Callable Bonds: Leading A Double Life
    Options & Futures

    Callable Bonds: Leading A Double Life

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center