The face value (par value) of a bond or a similar debt security that is used to figure out the amount of periodic/ regular interest payment (coupon). It is the principal of a bond that a bondholder would receive at maturity date, unless the bond’s issuers ends up in default. Once issued, i.e., trading initiates in the secondary market, a bond may trade at par (par value), below par, or above par. For example, a par bond is a bond trading at par value ($1,000). This value is also known as a redemption value. See also: bond par value.

For a preferred stock, par is the face value used to calculate the periodic dividend payments. It is the amount upon which the dividend is calculated: if the par value of a preferred stock is $1,000 and the dividend is 4%, then the issuer will pay $40 per year for the term over which the preferred stock remains outstanding.