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This may not be the most appropriate SE site to ask this question, but I can't seem to find a better place to ask, so here goes:

  • Do Puttable Bonds' put dates always fall on Coupon Dates? When they do, are the bonds puttable before or after the coupon?

  • Coupon Schedule. How are coupon payment dates usually calculated? Say if a semi-annual bond is issued on Jan 5, 2010, then are payment dates always on Jul 5 and Jan 5. What happens when they fall on weekend?

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@SRKX Why's this question retagged with "options"? – RAY Jul 11 '12 at 2:13
Because a puttable bond by definition has an embedded put, and you are asking question about a puttable bond's structure. – SRKX Jul 11 '12 at 6:12
Thanks. Optionality is not heart of the question though. Anyway, whatever helps people find the question. On another note, you removed "thanks" from my post. Is there a SE policy/guideline somewhere that advises against it? I'm asking because I tend to do that a lot, and I'll cut down on it if it's not a good practice. – RAY Jul 12 '12 at 1:46
We tend to remove courtesies as they add noise to the questions. – SRKX Jul 12 '12 at 7:06

Not all bonds have coupons, of course, especially in the world of convertible bonds (where puts are more common). I have yet to see a bond with a put date other than a coupon date. It is typical to forfeit a coupon in case of a put, but that's not universal.

As to coupon dates, there's usually a "next business day" clause. Generally speaking, the world of interest rates contains a whole slew of conventions for interest payments and business days. In principle, any contract might follow any of the available conventions, though in practice they group by country. Bloomberg and other data services will tell you which convention any given bond is following, or you can read the prospectus yourself.

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In my experience, put dates always fall on coupon dates. However, exercising the put should still entitle you to the coupon, since you have held the bond for the whole coupon period (or somebody has). Check the prospectus carefully on that point.

If the payment day falls on a non business day, the payment is usually made on the next good business day.

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