Question here regarding bond issue. Is the coupon rate the same rate at which a bond will issue at to investors on the market, or do they but the bond at a different price and tehrefore receive a different yield at the issue?
I am not a FI expert, but my sense is that most bonds are priced to something pretty close to what the expected market yield will be at issue. Doing this ensures the bond sales will fetch something close to par value, which is helpful because that’s how they figure out how many bonds to issue.
On the day of issue, however, the market yield may be a little different than what is assumed in the planning stage, so there can be some slippage.
There is such thing as off-market pricing, where you might offer 3% coupons in a 2% yield environment and therefore capture a premium at issuance. Things like that do happen, and if the issuer thinks that yields are going up anyway, this might be one way to game it, but I don’t believe it is the norm.
is tere anyway to actually find the yield at issue ofspecific bonds on bloomberg or somewhere else?
Bloomberg shortcuts in general: 1.) Calculate various yields, sensitivity measures, cash flow analysis, and total return for corporate bonds BC7, 2.) Yield Analysis & Other related Yield related Functions YA