DEFINITION of 'Announcement Date'

Announcement date is the date on which a company will announce the details regarding an issue of debt or equity. The announcement date is the first day the public will receive information regarding a new security issue.

The announcement date also refers to the day that coincides with the release of a corporate event or new financial news, such as interest rate changes or earnings reports.

BREAKING DOWN 'Announcement Date'

Announcement Date of New Issues

On the announcement date, companies will reveal the type of instrument or security they will be issuing. Prior to the announcement date, the issuer and the lead manager meet to have extensive discussions on the specification of the issue, such as target coupon, maturity date, nominal amount, and offer price. During this time, a trustee and principal paying agent are appointed, and the legal documentation and prospectus are prepared. On the announcement date, the company announces the new issue through a press release. The range in which the coupon rate is expected to fall is disclosed on this date. Underwriters interested in participating in the issue receive a formal invitation and are given the preliminary offering circular of the issue.

In many cases, the lead manager is also the primary underwriter. In these cases, the lead manager announces the bond issue publicly and promotes the transaction to prospective investors, inviting them to buy the bonds once they are issued.

For example, Company XYZ announces a $5 million debt issue of 10-year bonds with a coupon rate of 4.2% to 4.9%. Other features announced include the maturity date, denomination of each bond, payment date, method of offering, interest payment dates, rating, and whether the bond is unsecured or secured by collateral. The proceeds from the issue is to be used for the redemption of the company’s outstanding commercial paper. This announcement provides analysts with new expectations of what the company has planned for operations, as information regarding the reason for fund raising is often included in the announcement.

Announcement Dates for Corporate Actions

In the context of corporate actions, an announcement date is the day on which the company announces a corporate event such as a stock split, rights and warrants issue, dividend payment, merger and acquisition, etc. For instance, the announcement date for dividends, or declaration date, is when a company announces the date and amount of the next dividend payment. The ex-dividend date, which is the most important date in dividend investing, is also announced on the declaration date.

The announcement date for mergers and acquisitions (M&A) is the formal and public disclosure of a pending M&A deal through a press conference. Regulators and the exchange where the company is listed are also informed of the deal on the announcement date at which time the deal becomes public knowledge. This is also the day when the bidder confirms that it will make a formal offer to acquire the target company.

Earnings Announcement Date

The days leading up to an earnings announcement are usually filled with much speculation by investors and market analysts. Analyst estimates can be notoriously off-the-mark and can rapidly adjust up or down in the days leading up to the announcement, artificially inflating the share price alongside speculative trading. On the announcement date, the share price will increase or decrease, depending on how closely the actual earnings are to the estimated earnings.

RELATED TERMS
  1. Payment Date

    Payment date is the date set by a company when it will issue ...
  2. Trade Date

    A trade date is the month, day and year that an order is executed ...
  3. Ex-Dividend

    Ex-dividend is a classification in stock trading that indicates ...
  4. Odd Date

    The odd date is seen with some futures contracts for bonds and ...
  5. Short Date Forward

    A short date forward is an exchange contract involving parties ...
  6. Spot Date

    The spot date is the date at which a transaction is settled.
Related Articles
  1. Investing

    Declarations, Ex-Dividends and Record Dates

    Understanding the dates of the dividend payout process can be tricky. We clear up the confusion.
  2. Financial Advisor

    5 Ways to Date on a Budget

    Dating on a budget doesn't have to be boring. Try these 5 tips to find the best dates on a budget.
  3. Retirement

    The Unknown Dangers of Target Date Funds

    If they fit within your risk tolerance and have reasonable fees, target date funds can be an option.
  4. Investing

    Simple Math for Fixed-Coupon Corporate Bonds

    A guide to help to understand the simple math behind fixed-coupon corporate bonds.
  5. Retirement

    An Introduction To Target Date Funds

    Target date mutual funds can be an alternative to bonds and CDs for investors who do not wish to actively manage their savings. The reason: These financial products periodically reallocate fund ...
  6. Trading

    Understanding How Dividends Affect Option Prices

    Learn how the distribution of dividends on stocks impacts the price of call and put options, and understand how the ex-dividend date affects options.
  7. Investing

    What’s Wrong with Target Date Funds?

    Target date funds seem convenient, but you pay for that convenience with fees and other factors.
  8. Investing

    7 Common Bond-Buying Mistakes

    Find out how to avoid the costly mistakes made in bond portfolios everywhere. Learn to minimize the risk of suffering low or negative returns when trading.
  9. Investing

    How to use the dividend capture strategy

    Learn how to implement the dividend capture strategy, an aggressive, income-focused stock trading strategy investors can use to increase equity profits.
RELATED FAQS
  1. Who actually declares a dividend?

    Understand who actually declares a dividend when a company makes a dividend payment and how the payments of dividends appear ... Read Answer >>
  2. What do T+1, T+2 and T+3 mean?

    For security transactions, T+1, T+2, and T+3 refer to settlement dates which occur on a transaction date plus one, two and ... Read Answer >>
  3. If a long call is owned on the record date of a stock, is the owner of the option ...

    Learn how holding a long call option does not entitle the holder to a dividend on the underlying stock unless the call is ... Read Answer >>
  4. The “effective date” is defined as:

    a. the date a security's registration is approved - lasting for one year. b. the date the first transaction of an approved ... Read Answer >>
Hot Definitions
  1. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  2. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  3. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  4. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  5. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  6. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
Trading Center