Question

Are bonds held by Facebook traded at a premium or discount? Discuss why this would occur

Answer 1

Other things remain constant, if bonds held by Facebook, they would be traded at premium.

Things to understand - This is bond held or invested by Facebook not the bond issued.

If purchase price of the bond is above the par value, it is at premium and if purchase price of the bond is below the par value it is at discount.

Facebook being an IT giant with good Corporate Compliance and good Environmental, Social and Governance score. They are transparent organization with consistent growth records. So any investment in bonds by Facebook means it's a well thought decision as they are answerable to public being listed company. Facebook is looking at that organization with stability and security also they are finding ample of growth opportunity in the organization. So such bonds will also be in demand by other institutional investors so any bond held by Facebook will be traded at premium.