Attention noteholders, page-25

Say you have a $100 face value, zero coupon bond, 5 years with a yield of 5.0%

It would trade at a discount of 1.05^(-5) = 0.7835

Bond would trade at $78.35 at a 22% discount to face value to reflect the fact that you earn the face value via interest (with no coupon).

Bonds can trade at premiums or discounts to face value depending on whether or not there are coupons and the yield.

The discount (or premium) does not suggest that the issue is facing insolvency.

https://www.sec.gov/answers/zero.htm

This is directly quoted from the US Securities and Exchange Commission (link provided above)

"Zero coupon bonds are bonds that do not pay interest during the life of the bonds. Instead, investors buy zero coupon bonds at a deep discount from their face value, which is the amount a bond will be worth when it "matures" or comes due. When a zero coupon bond matures, the investor will receive one lump sum equal to the initial investment plus the imputed interest, which is discussed below."

A US Treasury bond at a deep discount does not imply that the US Treasury is going to default.