Corporate bonds are quoted as a percentage of face value on a 100-point scale, where 100 equals par. Since most corporate bonds have a $1,000 par value, each point in the quote represents $10: a bond quoted at 98.50 costs $985, and one quoted at 102.25 costs $1,022.50.1Fidelity. Corporate Bonds That price percentage is the headline number, but a usable quote also carries an identifier, a coupon, a maturity, and one or more yield figures, and the cash you actually settle for adds accrued interest on top.
The 100-Point Price Scale
The price on a corporate bond quote is not dollars. It is a percentage of par expressed on a scale where 100 is face value. Below 100 is a discount; above 100 is a premium. Corporate bonds are typically quoted in decimals down to fractions of an eighth of a point (0.125), which is different from U.S. Treasuries, quoted conventionally in 32nds.
Discount and premium both matter because the issuer redeems at par regardless of what you paid. Buy at a discount and you pick up a built-in gain at maturity. Buy at a premium and you absorb the difference as a loss. Both effects feed into the yield calculations that sit next to the price on the quote.
What Else Appears on the Quote
A price on its own does not identify a bond. Every bond carries a nine-character CUSIP, a unique identifier assigned by the Committee on Uniform Securities Identification Procedures.2Investor.gov. CUSIP Number A single company can have dozens of outstanding issues with different coupons, maturities, and call features, so the CUSIP is the only reliable way to confirm you are looking at the right one.
Alongside the CUSIP and price, a typical quote shows the issuer, the coupon rate, the maturity date, and a yield. The coupon rate is stated as a percentage of par: a 5% coupon on a $1,000 par bond pays $50 a year, almost always split into two semiannual payments of $25.3FINRA. Bonds The maturity date tells you when the issuer has to return principal.
Clean Price, Dirty Price, and Accrued Interest
The quoted number is the “clean price.” It excludes interest that has built up since the last coupon date. The cash you actually pay at settlement is the “dirty price,” which adds accrued interest to the clean price. Unless you happen to buy on a coupon date, your bill will be higher than the quoted price.
Accrued interest reimburses the seller for the portion of the upcoming coupon they earned while holding the bond. For corporate bonds, the calculation uses a 30/360 day-count convention: every month counts as 30 days, every year as 360.4FINRA. Accrued Interest Calculator
An example makes it concrete. A 5% coupon bond pays $25 every six months. Buy exactly two months after the last coupon date and you owe the seller 60 out of 180 days of that semiannual period, or roughly $8.33 in accrued interest on top of the clean price.
The Yield Numbers Next to the Price
Price tells you the cost. Yield tells you the return. They move inversely: as price rises, yield falls, because a fixed stream of coupon payments is being bought for more money.
Current Yield
Current yield is the simplest figure. Divide the annual coupon by the current price. A $1,000 par bond with a 5% coupon trading at $985 has a current yield of about 5.08% ($50 รท $985). It is easy to compute but incomplete, because it ignores the gain or loss you take when the bond redeems at par.
Yield to Maturity
Yield to maturity (YTM) is the fuller figure and the one used to compare bonds. YTM factors in every coupon, the time value of money, and the difference between what you paid and what you will receive at maturity. For a discount bond, YTM runs higher than the coupon rate because of the gain at redemption. For a premium bond, YTM runs lower. YTM is the yield most quotes display next to the price.
Yield to Worst on Callable Bonds
Many corporate bonds are callable, meaning the issuer can redeem early, usually at or above par. Issuers tend to call when rates fall and refinancing is cheaper, cutting off your income stream and forcing you to reinvest at lower rates. For callable bonds, the yield figure to focus on is yield to worst (YTW), the lowest yield across every possible call date and final maturity. On a premium callable bond, the yield to the nearest call date is almost always lower than YTM, and that worse outcome is the number the quote should be judged against. Dealer confirmations for callable bonds are required to show the yield calculated to the lowest outcome among all call dates, par option dates, and maturity.
Why Two Similar Bonds Quote at Different Yields
Corporate bonds carry credit risk, and the market prices that risk through yield spreads. A spread is the difference between a corporate bond’s yield and a Treasury of similar maturity, expressed in basis points, where one basis point is 0.01%.5Financial Industry Regulatory Authority (FINRA). Spread the Word: What You Need to Know About Bond Spreads A 150 basis point spread means the corporate yields 1.50 percentage points more than the comparable Treasury.
Rating agencies sort bonds into two broad camps. Investment grade covers ratings of BBB- or higher at S&P and Fitch, and Baa3 or higher at Moody’s. Anything below that is speculative grade, commonly called high yield or junk. Lower ratings mean wider spreads. Within a letter grade, Moody’s uses numeric modifiers (A1 is better than A2), while S&P and Fitch use plus and minus (A+ is better than A).6Fidelity. Bond Ratings
Spreads move with sentiment. Confident markets tighten spreads; stressed markets widen them. In late March 2026, for instance, the broad high-yield index spread was around 321 basis points over Treasuries.7Federal Reserve Economic Data (FRED). ICE BofA US High Yield Index Option-Adjusted Spread Two bonds with similar maturities can quote at very different yields simply because the market prices their credit risk differently.
Where the Quote Comes From
Corporate bonds do not trade on a centralized exchange. They trade over the counter through dealers, and the quotes you see are typically indicative prices at which a dealer is willing to buy (bid) or sell (ask). There is no consolidated tape of live bids and offers the way there is for stocks.
Checking a Quote Against TRACE
To fill that transparency gap, FINRA’s Trade Reporting and Compliance Engine (TRACE) requires firms to report secondary-market corporate bond transactions as soon as practicable and no later than 15 minutes after execution.8Financial Industry Regulatory Authority. Trade Reporting and Compliance Engine More than 80% show up within five minutes.9Financial Industry Regulatory Authority (FINRA). What Is TRACE and How Can It Help Me? TRACE reports completed trades, not quotes, but pulling up recent TRACE prints for the same CUSIP on FINRA’s BondFacts or your brokerage platform tells you whether the price a dealer is showing you is in line with where the bond has actually been trading.
Bid-Ask Spread and Markup Disclosure
The gap between bid and ask is your implicit transaction cost. Large, liquid investment-grade issues have tight spreads. Smaller or less liquid issues can have wide ones. Size matters too, and institutional-sized orders generally get better pricing than retail-sized ones. Since May 2018, FINRA Rule 2232 has required dealers to disclose their markup or markdown on retail corporate bond trades, in both dollars and as a percentage of the prevailing market price, when the dealer bought or sold the same bond in an offsetting trade the same day.10FINRA. 2232. Customer Confirmations That disclosure lands on your trade confirmation and gives you a concrete number to evaluate.
Settlement and Lot Size
Corporate bond trades settle T+1, one business day after the trade date. That has been the standard since May 28, 2024, when the SEC shortened the cycle from T+2.11FINRA. Understanding Settlement Cycles: What Does T+1 Mean for You? Settlement is when payment and delivery actually occur, and it is the date used to compute accrued interest.
A standard institutional round lot is $100,000 in face value or a multiple of it. Anything smaller is an odd lot, and odd lots typically carry higher transaction costs because they are less efficient for dealers to handle. Most individual investors trade in odd lots, which is part of why retail pricing is generally worse than institutional. Brokerage minimums for corporate bonds often start at one bond ($1,000 face) or five bonds ($5,000), and per-bond costs tend to improve as the order size grows.