Original Issue Discount (OID)

An original issue discount (OID) is the discount in price from the face value of a bond at the time a bond or debt instrument is issued first. The OID is the amount of or the difference between the original face value and the price that is paid for the bond. Bond issuers use OIDs to attract buyers to purchase their bonds so that issuers can put up funds needed for their business. A lot of zero-coupon bonds utilize large OIDs to attract buyers to purchase their products.

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