medium · Debt Capital Markets
What happens to the OID on a bond if the issuer decides to refinance the debt before its scheduled maturity?
- The remaining unamortized OID is typically accelerated and expensed immediately.
- The OID continues to amortize according to the original schedule.
- The OID is refunded to the issuer by the bondholders.
- The unamortized OID is converted into equity credit.
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