Pls explain bond terminology

[joeu2004]

Someone asked for help with a financial problem. Generally, I know how to
solve the problem. But some of the terminology does not jibe with my (weak)
understanding of bond terminology.

The facts of the user's problem as stated: "A corporate bond has a face
value of $1000 and an annual coupon interest rate of 6%. Interest is paid
annually. 12 years of the life of the bond remain. The current market
price of the bond is $1027, and it will mature at $1100."

What does not make sense to me is "face value of $1000" v. "will mature at
$1100".

The wiki/Face_value page [1] says: "The face value of bonds usually
represents the [...] redemption value. [....] As bonds approach maturity,
actual value approaches face value".

I thought "redemption value" is the amount to be paid at maturity (plus any
accrued interest).

But the wiki/Redemption_value[2] cites a www.12manage.com page [3], which
says: "The Redemption Value is [...] the price at which a bond [...] can be
called by the issuing company. [....] The call price before its maturity
date typically exceeds the Face Value of the bond".

That would suggest that the redemption value is __not__ the face value. (?!)

(Then again, I thought call price and redemption value are two
separately-stated terms of a bond.)

Moreover, the www.12manage.com page defining face value [4] says:
"Corporate Bonds are usually issued with $1000 face values [...]. [....]
Interest on a bond is calculated on this value; for example a $1000, 7%
corporate bond, will pay an annual interest of $70."

So for the bond terms in the user's problem above, would the YTM be the IRR
of the following annual cash flows: -1027, 60 {11 times}, 60+1100?

(I thought the interest coupon would be $66: 6% of $1100.)

Compounding my confusion is the fact that the www.12manage.com "face value"
page [2] also says: "Although the price of bonds fluctuates from the date
they are issued until redemption, they are redeemed at their Maturity date
at their Face Value, unless the issuer defaults".

For user's problem above, that would suggest that $1000, not $1100, is the
amount that the bond will "mature at", contrary to the facts of the problem
above. (?!)

Can anyone clarify the terms "face value", "redemption value" and "value at
maturity" so they are consistent with the cited definition as well as the
user's problem above?

Or is one (or both) misusing the terminology?

The bottom line is: how to compute the YTM based on the facts of the user's
problem?

I know that the YTM is the IRR of "some" cash flows. But the individual
cash flows are unclear to me because I am confused about the terminology.


-----
[1] http://en.wikipedia.org/wiki/Face_value
[2] http://en.wikipedia.org/wiki/Redemption_value
[3] http://www.12manage.com/description_redemption_value.html
[4] http://www.12manage.com/description_face_value.html

[joeu2004]

Errata.... I wrote:
> The wiki/Face_value page [1] says: "The face value of bonds usually
> represents the [...] redemption value. [....] As bonds approach maturity,
> actual value approaches face value".

[....]

> But the wiki/Redemption_value[2] cites a www.12manage.com page [3], which
> says: "The Redemption Value is [...] the price at which a bond [...] can

> be called by the issuing company".

>
> That would suggest that the redemption value is __not__ the face value.
> (?!)

Not at all. The two together suggest that the redemption value is the face
value if the bond is redeemed at maturity; otherwise, the redemption value
is the call price if the bond is called earlier.

The point I was trying to make is: I am confused by the fact that the
user's problem statement says: on the one hand, the bond's face value is
$1000; but on the other hand, the (redemption) value at maturity is $1100.

It is __those__ statements that suggest the term "face value" is not the
same as the term "value at maturity", seemingly in contrast with the wiki
and www.12manage.com definitions above.

Again, the point of all this, besides improving my understanding of the
terminology, is to determine the YTM. Obviously, the present value is
$1026. Presumably the future value is $1100. The question is: what is the
coupon amount: $60 (6% of the face value of $1000) or $66 (6% of the value
at maturity of $1100)?