Undated Issue

What is ‘Undated Issue’

A government bond that has no maturity date, and pays interest in perpetuity. While the government can redeem an undated issue if it so chooses, since most existing undated issues have very low coupons, there is little or no incentive for redemption. Undated issues are treated as equity for all practical purposes due to their perpetual nature, and are also known as perpetual bonds.

Explaining ‘Undated Issue’

Perhaps the best-known undated issues are the U.K. Government’s undated bonds or gilts, of which there are eight issues in existence, some of which date back to the 19th Century. The largest of these issues presently is the War Loan, with an issue size of £1.9 billion and a coupon rate of 3.5% that was issued in the early 20th century.

Further Reading

  • Earnings Management and The Post-Issue Underperformance in Seasoned Equity Offerings – ideas.repec.org [PDF]
  • “A Dead Battery” Aubrey Williams' Undated Auto-Biographical Account of His Work with the Reconstruction Finance Corporation and the New Deal – www.tandfonline.com [PDF]
  • The Impact of Fiscal and Monetary Policies on Economic Performance in Sudan – repository.sustech.edu [PDF]
  • Transnationalism and the League of Nations: understanding the work of its economic and financial organisation – www.jstor.org [PDF]