What is a ‘Tap Issue’
A tap issue is a procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. The bonds are issued at their original face value, maturity and coupon rate, but sold at the current market price.
Explaining ‘Tap Issue’
This method of issuing additional debt was adopted by the British and French governments. Tap issues allow an organization to avoid certain transaction or legal costs and expedite fund raising. The issuer bypasses many of the initial formalities surrounding a bond issue, such as the prospectus, and proceeds to auction off the new securities. Issuing on tap is often suited for smaller fund-raising attempts, where the cost of a new issue is too high when compared to the amount borrowed.
Further Reading
- Macaulay's duration: An appreciation – www.jstor.org [PDF]
- Financing infrastructure development: Asian developing countries need to tap bond markets more rigorously – www.adb.org [PDF]
- The interbank market after the financial turmoil: squeezing liquidity in a “lemons market” or asking liquidity “on tap” – www.sciencedirect.com [PDF]
- … and trill clusters in typical and protracted phonological development: Challenging segments in complex phonological environments. Introduction to the special issue – www.tandfonline.com [PDF]
- Tap water scalds among seniors and the elderly: socio-economics and implications for prevention – www.sciencedirect.com [PDF]
- When the tap stays dry: water networks in eastern Germany – www.tandfonline.com [PDF]
- Residents' perceptions of tap water and decisions to purchase bottled water: a survey analysis from the Appalachian, big Sandy coal mining region of West Virginia – www.tandfonline.com [PDF]
- Beyond the tap: City water service as a catalyst for regional economic development – awwa.onlinelibrary.wiley.com [PDF]
