When-, As- and If-Issued Securities
Chapters in this video
What this video covers
- Why a when-issued (WI) trade has no settlement date at the time of the trade, and why T+1 is always the wrong answer
- How accrued interest on WI municipal bonds stays at zero until the settlement date is established after issuance
- What happens to all WI trades if the issuer cancels the offering: complete void with no remaining obligation
- The three corporate actions that trigger when-distributed (WD) trading: reorganizations, stock splits, and spin-offs
- How to distinguish WI triggers (new issuances like municipal bonds and initial public offerings) from WD triggers (corporate actions)
- Why both WI and WD trades share cancellation risk and post-event settlement, but differ on accrued interest applicability
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