Define Face Interest Rate:

"The face rate, also known as the coupon rate, is the fixed annual interest rate specified on a bond or debt instrument."

Explain Face Interest Rate:

What is Face Interest Rate?

Face Rate is the rate at which the issuer agrees to pay interest to the bondholders or lenders on the face or par value of the bond. The coupon rate determines the interest payments the bondholder will receive throughout the bond's term until it matures.

The coupon rate is usually expressed as a percentage of the face value of the bond and is typically paid semi-annually or annually. It remains fixed throughout the life of the bond unless the bond has variable or floating interest rates.

It's worth noting that the market price of a bond may vary during its lifespan, resulting in a yield to maturity (YTM) that differs from the face rate. Investors often consider the relationship between the coupon rate and prevailing interest rates when analyzing bond investments.

Example of Face Interest Rate 

Here's an example of Face Interest rates / Coupon Rates across different countries, based on hypothetical data:

1. United States: Government Bonds:

• 10-year U.S. Treasury Bond: Coupon Rate of 2.5%
• 30-year U.S. Treasury Bond: Coupon Rate of 3.0%

Corporate Bonds:

• ABC Corporation Bond: Coupon Rate of 4.0%
• XYZ Corporation Bond: Coupon Rate of 5.5%

2. United Kingdom: Government Bonds:

• 10-year UK Government Bond (gilts): Coupon Rate of 1.75%
• 30-year UK Government Bond (gilts): Coupon Rate of 2.5%

Corporate Bonds:

• DEF Corporation Bond: Coupon Rate of 3.25%
• GHI Corporation Bond: Coupon Rate of 4.5%

3. Germany: Government Bonds:

• 10-year German Government Bond (Bund): Coupon Rate of 0.5%
• 30-year German Government Bond (Bund): Coupon Rate of 1.25%

Corporate Bonds:

• JKL Corporation Bond: Coupon Rate of 2.0%
• MNO Corporation Bond: Coupon Rate of 3.75%

Please note that the coupon rates provided in this example are hypothetical and may not reflect the current market rates or specific bond issuances. The actual coupon rates can vary based on market conditions, credit ratings, bond maturities, and other factors.