BROWSE

Tap Issue

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]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

Financing infrastructure development: Asian developing countries need to tap bond markets more rigorouslyFinancing infrastructure development: Asian developing countries need to tap bond markets more rigorously
www.adb.org [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

The interbank market after the financial turmoil: squeezing liquidity in a “lemons market” or asking liquidity “on tap”The interbank market after the financial turmoil: squeezing liquidity in a “lemons market” or asking liquidity “on tap”
www.sciencedirect.com [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

… and trill clusters in typical and protracted phonological development: Challenging segments in complex phonological environments. Introduction to the special issue… and trill clusters in typical and protracted phonological development: Challenging segments in complex phonological environments. Introduction to the special issue
www.tandfonline.com [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

Tap water scalds among seniors and the elderly: socio-economics and implications for preventionTap water scalds among seniors and the elderly: socio-economics and implications for prevention
www.sciencedirect.com [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

When the tap stays dry: water networks in eastern GermanyWhen the tap stays dry: water networks in eastern Germany
www.tandfonline.com [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

Residents' perceptions of tap water and decisions to purchase bottled water: a survey analysis from the Appalachian, big Sandy coal mining region of West VirginiaResidents' 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]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …

Beyond the tap: City water service as a catalyst for regional economic developmentBeyond the tap: City water service as a catalyst for regional economic development
awwa.onlinelibrary.wiley.com [PDF]
… or measures not substantially different from it, has often been used in economics, finance, and insurance … The Effects of Interest Rate Increases on the Banking System," American Economic Review 35 … a 3.5 to 3.9 percent coupon and be noncallable and preferably a 'tap' issue …



Q&A About Tap Issue


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.

When would you use a tap issue?

Tap issues are often used for smaller fund raising attempts when compared to the amount borrowed.

How does this method differ from other methods of raising money?

This method differs in that it allows companies to sell stock directly to the public without going through intermediaries such as banks or investment firms.

Who typically uses this method of raising money?

Smaller companies that do not have access to capital markets or institutional investors may use this method.

Who adopted this method of issuing additional debt?

The British and French governments adopted this method of issuing additional debt.

Why would a company use a tap issue instead of other methods of raising money?

Companies can avoid transaction and legal costs with a tap issue, making it ideal for smaller fundraising attempts.

How does the tap issue work?

The bond is issued at its original face value, maturity and coupon rate, but sold at the current market price.