Original Issue Stock

Original Issue Stock - Original Issue Stock is securities issued when a firm is first incorporated. It refers to the amount by which a security's price at issuance is lower than par value. In the case of fixed-rate capital securities, original-issue discount considered to exist if issuer is entitled to elect to defer distributions. In structuring a private equity transaction, use of a preferred stock with liquidation preference or other clauses that guarantee a fixed payment in the future can potentially create adverse tax consequences. It is the amount of the difference between the par or redemption price and the price of the security.