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The underlying amount borrowed or owed, separate from interest and fees.
Interest is calculated according to the contract, often using the unpaid principal as its base. Repayments allocated to principal reduce that base; interest-only payments do not. Fees or unpaid interest may be added to a balance under some agreements, so the accounting can become more complicated. For a bond, principal commonly refers to the amount due under its repayment terms.
Imagine a J$100,000 loan charging 1% interest for a month. The month's interest is J$1,000. If a J$6,000 payment covers that interest first and has no fees, J$5,000 reduces principal, leaving J$95,000. Paying only J$1,000 would leave principal at J$100,000. The example uses a simplified monthly calculation, not the terms of any actual loan.
FosRich seeks time from bondholders as restructuring talks continue