At 5%, interest of $500 is paid annually on your $10,000 bond. It was issued by the Treasury when interest rates were low and is not due (redeemable) for 20 years from the date of issuance. You cannot get the Treasury to give you $10,000 today so your only other option if you wish to sell is to find a buyer on the secondary market. (The "primary market" is when you bought the bond directly in the first place)
If the going rate is 6.5%, then interest of $650 is paid annually on a new $10,000 bond. If you try to sell for $10,000 you will find no takers. They have no incentive to buy your bond for $10,000 when they can invest their money more profitably, still in a "risk-free" investment.
Someone will buy your bond at a lower selling price:
Your buyer wants to receive a return on his investment at the rate of 6.5% He can invest $10,000 on the primary market and receive a return of $650 annually.
Or...he can offer to buy your bond for $7,692.31 because at that price, the $500 per year payment will give him 6.5% return (($500) divided by ($7,692.31) = 6.5%).