“Above Par” refers to a bond trading at a price higher than its face value. This occurs when the bond offers higher income distribution compared to others available in the market, generally due to a decline in interest rates or an increase in the issuer’s credit rating. The pricing is also influenced by market dynamics such as demand and supply. Trading above par can be advantageous for investors seeking higher interest payments.
Suppose an investor purchases any bond beyond its price over Par. In that case, such an investor will definitely obtain a high rate of interest payments just because of the coupon rate fixed in the market at a higher prevailing interest rate, etc.
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