Coupon: the annual interest rate on a bond paid by the issuer and is presented as a percentage of the bond’s par value. For instance, a bond with a face value of 100,000 VND and a 10% coupon will yield a 10,000 VND coupon annually for 1 year.
In most cases, the bond’s coupon method remains unchanged after issuance.
Return on Investment (also known as bond yield): measures the actual return received by bondholders based on the bond’s purchase price.
It depends on factors such as market supply and demand, issuer credibility, remaining term of the bond, collateral, and the bond’s coupon.
Bond par value: the face value recorded on the bond. Serving as the basis for determining the coupon interest payable by the issuer. It also represents the amount the issuer must repay when the bond matures.
Most bonds have a par value of either VND 100,000 or VND 100 million.
Bond price: the buying/selling price of the bond in the market. Several factors influence the bond price, with the most critical being the bond’s coupon correlation with similar bonds.
