above par

A man selling fairly used generators at ₦180,000 and a woman selling the exact same model, brand new in the box, at ₦230,000, are not doing anything strange. Bonds work the same way, except the price moving above the original tag tells you something specific about interest rates, not about wear and tear.

Every bond is born with a face value, usually a round number like ₦1,000 or ₦100,000, and a fixed interest rate called a coupon. That coupon does not change once the bond is issued. So if interest rates in the wider market fall after your bond was created, your bond suddenly looks generous compared to new bonds being issued at the lower rate. People want it, and they will pay more than the face value to get it. That extra price is what Above Par means.

Say the Nigerian government issued a bond years ago paying 14 percent when that was the going rate. If new bonds today only pay 9 percent because rates have dropped, your old 14 percent bond becomes the envied one at the party. Investors bid its price up past ₦1,000 per unit, sometimes to ₦1,050 or ₦1,080, because getting that fixed 14 percent return is worth paying extra for.

A Nigerian in London holding UK gilts sees the same thing happen when the Bank of England cuts rates after their bond was issued at a higher fixed coupon. The bond itself has not changed, the world around it has, and that is what pushes the price above par.

The flip side matters too. If rates rise after your bond was issued, your fixed coupon starts looking stingy, and your bond trades below par instead, at a discount. Above Par and below par are just the market's way of adjusting old promises to match new conditions.