Dated Date

What Is the Dated Date?

Frequently used to distinguish a particular series of bonds of an issuer, the dated date is the date on which interest starts to accrue on a fixed-income security. Investors who purchase a fixed-income security between interest payment dates must likewise pay the seller or issuer any interest that has accrued from the dated date to the purchase date, or settlement date, notwithstanding the face value.

Grasping Dated Date

Investors buy bonds issued by corporations, the government, and districts to receive interest income. Many bonds guarantee a periodic payment of coupon or interest to bondholders until the bond develops. For instance, a bond with a par value of $1,000 and a 5 percent coupon rate to be paid semi-yearly will pay its investors 5 percent/2 x $1,000 = $25 like clockwork. How about we accept the recently issued bond was sold at some point in January 2018 and its maturity date is February 1, 2023. Assuming interest payments are scheduled for February 1 and August 1 consistently until the bond develops, the dated date will be February 1, 2018. An investor will receive his first $25 on the primary coupon date, August 1, 2018. The principal coupon period, then, at that point, is the period from the dated date until the primary coupon date.

The dated date is the date when interest starts to accrue on bonds and notes. Inside the main coupon period, the days from coupon to settlement will continuously be processed with reference to the dated date. An investor who purchases the bond pays the amount equivalent to the interest accrued from the dated date to the settlement date and is repaid for the extra interest when the issuer makes the main interest payment on the security.

In the event that the fixed-income security's date of issuance is equivalent to the dated date, the dated date is additionally the issue date. It is likewise conceivable that a coupon paying bond is issued after the primary accrual date, in which case, the issue date, and the dated date will be unique. A difference might happen between the two dates since issue dates can't fall on a holiday or end of the week. For instance, a dated date might be on Saturday, however the issue date will be the next Monday. Assuming the issue date falls after the dated date, the bond will be traded with accrued interest. In effect, the dated date can be on, before, or after the issue date.