Outstanding amount
What is the Outstanding amount?
The outstanding amount of a bond refers to the total principal value of the bond that has not yet been repaid by the issuer. It represents the remaining balance of the original amount borrowed by the issuer when the bond was initially issued. As the issuer makes periodic interest payments to bondholders, the outstanding amount decreases gradually over time until the bond reaches its maturity date, at which point the issuer is obligated to repay the remaining principal in full.
Why is the Outstanding amount important?
The outstanding amount is important as it indicates the amount of money still owed to them by the issuer. Monitoring the outstanding amount helps investors track the performance of their bond investments and assess the issuer's ability to meet its repayment obligations. Additionally, the outstanding amount influences the yield-to-maturity calculations and overall returns that investors can expect to receive from holding the bond until maturity.