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Glossary

Tap Issue (Reopening)

Additional placement is a procedure that enables the borrower to place a new amount of bonds or other debt instruments based on the past issues.


The bonds are issued with the same parameters: par value, maturity and coupon rate, but are placed at the current market price.


Sometimes the issuer has a bond issue program, which specifies the desired amount of borrowing. However, the full announced amount is not offered for the first placement of an asset at will or under conditions existing at that time on the market. Then the issuer may make an additional placement of this issue after a certain period of time.


The number of additional placements is unlimited; for some government bonds, the additional placements may number in tens or even hundreds.


Additional placement can be made both by auction (which is typical for government and municipal bonds) and by bookbuilding (Underwriting). In practice, there are cases when the method of borrowing additional placement may differ from the method of initial placement.


Additional placements can be made on any type of issues, such as discount bonds, coupon bonds and Eurobonds.
 

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