Feb 14, 2025 · What Is an Original Issue Discount (OID)? An original issue discount (OID) is the discount in price from a bond's face value at the time a bond or other debt instrument is first issued. Bonds...

Original Issue Discount (OID) refers to the discount at which a debt instrument like a bond is first issued. It indicates the difference between the bond’s face value or redemption price and the bond issuance price, where the bond issuance price is less than the bond’s face value.

Original Issue Discount (OID): This occurs when the Face Value of a bond is $100, but the company issues it for some amount less than $100, such as $90, because its Coupon Rate is lower than market rates on similar bonds, or because there …

Mar 24, 2024 · An original issue discount (OID) occurs when debt securities are sold below their redemption price. If a debt instrument is sold at a discounted price lower than the redemption price – i.e. the par value – an original issue discount (OID) is created.

An OID also known as original issue discount is a debt instrument with a lower value compared to the time it was bought. The investor receives the face value after maturity with interest paid by the issuer or borrower.

Mar 17, 2025 · Form 1099-OID: Original Issue Discount is an Internal Revenue Service (IRS) form that taxpayers receive if their taxable income for the year includes any original issue discount (OID)...

Sep 7, 2023 · An Original Issue Discount (OID) is a unique financial concept that arises when a bond or other debt instrument is issued for a price lower than its par (face) value. The OID represents the difference between the issue price and the bond's redemption value at maturity.

An Original Issue Discount (OID) is the difference between the face value of a bond (the amount paid back when the bond matures) and the price at which the bond is initially sold. For example, if a company issues a $1,000 bond but sells it for $950, the $50 difference is the OID.

Original issue discount (OID). OID is a form of interest. It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID.

If the issuer offers the bond at less than its original face value it’s deemed to be sold with an original issue discount or OID. The amount or discount is then a straightforward difference between the par value and the value at which it sells.