If a bond issuer defaults, what do I get back?

Question

Say I own a bond with some principal, coupons, and amortizations (i.e. not necessarily a bullet bond).
If at some point before maturity the issuer defaults, I've heard of people saying "recovery rate" and throw around numbers like 40 % but … 40 % of what?
40 % of the bond price as of the default date?
40 % of the current principal?
40 % of the current principal + all the missing coupons?

RonJohn · Answer

I'm pretty sure the recovery rate is a fraction of the face value, since that's what you get paid back when the bond expires.

Bob Baerker · Answer

This Investopedia article explains what recovery rate is:

Recovery rate is the extent to which principal and accrued interest on defaulted debt can be recovered, expressed as a percentage of face value. The recovery rate can also be defined as the value of a security when it emerges from default or bankruptcy.

If a bond issuer defaults, what do I get back?

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