What is the annual interest the issuer promises to pay on the face value of a bond?

The annual interest that the issuer promises to pay on the face value of a bond is known as the coupon rate. This rate is expressed as a percentage of the bond's face value and is typically paid to bondholders in regular intervals, often semiannually. For example, if a bond has a face value of $1,000 and a coupon rate of 5%, the issuer will pay $50 annually to the bondholder. The coupon rate remains fixed throughout the life of the bond, providing a predictable income stream.