What is original issue date?

Answered by Willie Powers

The original issue date refers to the date on which a debt instrument was first offered to the public. This term specifically applies to debt instruments that are publicly offered, meaning they are made available to a wide range of potential investors.

When a company or government entity decides to raise funds through the issuance of debt, they may choose to make these debt instruments available to the public for purchase. This can be done through various means, such as an initial public offering (IPO), where the debt instrument is offered for the first time to potential investors.

The original issue date is an important date as it marks the beginning of the instrument’s existence in the public market. It is the starting point for various calculations and considerations related to the debt instrument, including interest payments, maturity dates, and potential trading activities.

For example, let’s say a company decides to issue bonds to raise funds for a new project. They go through the process of preparing and registering the bond offering with the relevant regulatory authorities. Once all the necessary approvals are obtained, the company announces the offering to the public and sets a specific date for the bonds to be available for purchase.

On this designated date, the bonds are officially considered to be issued to the public, and this date becomes the original issue date. From this point forward, the company is obligated to make interest payments to bondholders and eventually repay the principal amount at maturity.

The original issue date is important for investors as well. It allows them to track the duration of their investment and calculate the accrued interest since the original issue date. Additionally, the original issue date may impact the trading and pricing of the debt instrument in the secondary market.

The original issue date is the date on which a debt instrument is first made available to the public. It marks the beginning of the instrument’s existence in the public market and is significant for both issuers and investors.