// definition
Issue premium
Issue price above par
Short definition
The excess of a bond’s issue price over face value. The issuer receives more cash than the principal created, in exchange for the full contractual payment stream, including coupons. The premium affects yield and is amortised over the bond’s life in accrual accounts. It differs from the term premium, an estimated compensation for interest-rate risk.
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Intuition
Cash received at issue belongs to a contract specifying future payments.