Original Issue Discount Security

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Original Issue Discount Security

A bond or other debt instrument that is issued at a price below its face value. For example, a bond with par of $10,000 might be issued to an investor for $7,000. All zero-coupon bonds are original issue discount debt.
References in periodicals archive ?
Prior to the 1982 tax code changes, original issue discount bonds provided lower interest costs to the issuer as a result of alternative methods of taxing issuer and holder.
Example 1: Original issue discount bonds purchased at an acquisition premium.
For many investors, the major disadvantage of owning corporate zero-coupon bonds and original issue discount bonds stems from a negative cash flow.

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