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The dated date is the official date printed on a bond from which interest begins to accrue, regardless of when the bond is actually issued or delivered to buyers. On most bonds, the dated date and the issue date are identical. But when settlement or delivery delays push the actual issuance past the date printed on the certificate, interest still starts running from the dated date. You pay for that accrued interest at settlement even though you did not hold the bond for the days between the dated date and the actual delivery date.
This matters most in the new-issue municipal bond market, where underwriting and delivery timelines sometimes create a gap of several days between when the bond is dated and when it clears into your account.
Three dates govern a bond's life, and each serves a different purpose. Confusing them costs you money at settlement.
| Dated Date | Issue Date | Settlement Date | |
|---|---|---|---|
| Definition | Date from which interest begins to accrue; printed on the certificate | Date the bond is officially sold to investors | Date the bond is delivered and payment is exchanged |
| Controls Interest Accrual? | Yes | Usually, when it equals the dated date | No |
| When They Differ | When delays push delivery past the printed date | Can precede or coincide with settlement | Always follows the issue date |
When you buy a bond in the secondary market between coupon dates, you compensate the seller for the interest that has accrued since the last coupon payment. When you buy a new-issue bond where the dated date precedes your settlement date, you compensate the issuer for accrued interest from the dated date to your settlement date. Either way, that accrued interest is added to the price you pay and is returned to you as part of the first coupon payment.
Think of it like prorating rent: you pay for the days you occupy the unit, and accrued interest works on the same principle.
Municipal bonds are where the dated date distinction shows up most clearly. In a new-issue municipal offering, the dated date is set by the issuer when the bond documents are prepared. Settlement typically occurs several weeks later when the underwriting process concludes. Every day between the dated date and your settlement date is a day of accrued interest you owe at closing.
On a $100,000 municipal bond with a 4% coupon and a five-day gap between the dated date and settlement, you pay approximately $55 in accrued interest at closing. Your first coupon payment six months later reimburses that amount as part of the full coupon. The net effect is neutral, but the cash flows at settlement and at the first coupon date do not match the coupon rate alone.
Zero-coupon bonds pay no periodic interest. The dated date still appears on the certificate, but since there are no coupon payments, it serves primarily as the starting point for calculating original issue discount accrual over the bond's life. The IRS requires zero-coupon bond holders to recognize imputed interest income annually, and that calculation runs from the dated date.
With deep roots in traditional finance and the digital asset industry, Acquire.Fi operates as a specialist M&A advisory firm. Coverage spans M&A, secondaries, OTC, and capital markets advisory across digital assets and frontier tech. Our team has decades of combined experience across every stage of the deal lifecycle.
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