From the Collaborative Bond and Money Market Data Portal.
A buyback is the repurchase of outstanding debt securities by an issuer. It is the opposite of a tap, where issuers are selling additional debt securities that become fungible, after lockup, with the first issued securities. Where a tap increases outstanding debt, the buy back reduces it. Buy Backs are recorded like taps but with a negative issue amount.
Issuers can increase liquidity by increasing the number of available debt instruments through taps. This increases liquidity as the number of available bonds increases. It is necessary because bond holders tend to be buy and hold. This means that over time the available stock of secondary bonds, becomes less and less, which can affect pricing. To promote a liquid curve, bond issuers tap specific benchmark maturities.
Issuers will buy back debt instruments either to reduce outstanding debt levels, or to provide liquidity to the market for their own instruments. They may do this to reorganise their funding curve for example by lengthening duration. The latter involves buying back a shorter dated bond and issuing a longer dated one.
Governments and other larger issuers tap and buy back very frequently. The total Issued Amount (including taps) therefore does not always reflect the total amount of outstanding bonds. The oustanding amount increases with a tap and decreases with a buyback.
In the Collaborative Bond and Money Market Data Model the Tap classification appears within the field Amount which is part of the universe of Bond and Money Market Instruments.
For information on Tap and Buyback in the Bond Market, please use the Instrument search tool.
For information on the current size and composition of the Tap and Buyback Bond Market, please use the data sheet tool.
For information on active issuers in the Tap and Buyback Bond Market, please use the issuer search tool.
For information on active dealers in the Tap and Buyback Bond Market, please use the dealer search tool.
For information on active investors in the Tap and Buyback Bond Market, please use the fund search tool.
