Premium Bond
A bond that is priced higher than its par value.
Investopedia Commentary
If a bond's price is higher than its par value it is selling at a premium this occurs because the interest rate on the bond is higher than the prevailing rates in the market, making the premium bond worth more than a bond paying a lower rate. For example, if a bond with a 5% coupon were selling at par ($1000 let's say), it would be worth less than the bond paying 7%. Therefore the bond paying 7% would have to be priced higher than par, thus equalizing the attractiveness of the two bonds.
Related Links
Bond Basics Tutorial
Advanced Bond Concepts
Trying To Predict Interest Rates
See also: Bond, Discount Bond, Face Value, Interest Rate, Original Issue Discount - OID, Par Value, Yield To Maturity - YTM
premium bond