what is an undated issue 
an undated issue is a government bond that has no maturity date resulting in interest payments that last into perpetuity understanding undated issuetechnically speaking the pre established agreed upon term for which an undated issue will pay interest is essentially forever an undated issue can function from the bond holder s perspective much like a dividend paying stock since the holder will continue to receive interest payments on a recurring ongoing basis for a long period of time for obvious reasons undated issues are sometimes also known as perpetual bonds or just perps for short while the government can redeem an undated issue if it so chooses it would usually not exercise this option since most existing undated issues have very low coupons there is little or no incentive for redemption undated issues are treated as equity for all practical purposes due to their perpetual nature as opposed to being treated as debt one difference that sets these bonds apart from other forms of equity though is that they come with no corresponding vote attached so the holder has no voting related influence or control over the issuing entity banks consider undated issues to be a form of tier 1 capital a category that includes equity capital and disclosed reserves this means that these bonds are useful in helping banks to fulfill their capital reserve requirements undated issues continue to be offered in the current financial landscape but they are not as in demand as the more popular financial instruments such as municipal bonds or treasury bonds undated issues in historyundated issues have been around for a long time many financial historians credit the british government for creating the concept or at least for introducing the first widely recognized examples financial experts recorded the first british release of undated issues back in the 18th century perhaps the best known undated issues are the u k government s undated bonds or gilts also referred to as gilt edged securities up until fairly recently there were eight issues in existence some of which dated back to the 19th century the largest of these issues in recent times was the war loan with an issue size of 1 9 billion and a coupon rate of 3 5 percent that was issued in the early 20th century however undated gilts have now become a part of financial nostalgia in the uk the last remaining undated bonds in the uk portfolio were redeemed in july 2015 as part of a program initiated by the british chancellor 