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.