A debt exchange offer invites holders to swap old bonds for new ones — longer tenor, different coupon, sometimes a haircut, sometimes a consent that rewrites the old terms for everyone. It is voluntary at the holder level, but a high take-up plus collective action can make the leftover old bond a very different security. Sitting out is not always sitting in the same instrument you started with.
Competitive instructions name a spread or a price; non-competitive ones accept whatever clearing level the issuer sets. If too much paper is offered, the issuer scales back. A straight debt repurchase (a cash tender) adds a cap: the company will buy up to a stated nominal and no more. Partial exchanges leave a residual old ISIN. Booking a full exit on a capped offer is the same error as on an equity tender.
Consent solicitations often travel with the exchange. Holders who tender also vote to strip covenants on the old notes. A successful consent can leave the untendered rump with weaker protection, a longer call, or a collapsed change-of-control put. The holding you did not offer is not guaranteed to be the same instrument you started with. That is why the golden copy has to carry the consent as well as the new ISIN.
Atlantic Horizon UCITS ICAV holds £8 million nominal of Thames Industrial plc 5.50% 2028 notes in Euroclear through State Street. Thames offers an exchange into 4.00% 2032 notes, seeking £500 million, and a consent to amend the 2028 covenants. The manager must decide whether to tender, at what price or spread, and whether the consent is acceptable even on the residual. Dublin cannot treat the 2028 line as unchanged until that consent result is in the books.
The Cayman sleeve of the same house may hold the same 2028s, or a Nippon Industrials KK convertible that can be exchanged rather than converted. Two products, one custodian, two elections. Irish UCITS administration cannot outsource the ICAV's final NAV or its shareholder register while the old notes are half-in, half-out. Dealers in the fund are buying whatever mix of 2028s, 2032s, and cash the fill actually produced.
Open-market debt buybacks, like equity ones, may never appear as a corporate action at all. Thames buying its 2028s in the tape is a trade, not an MT565. A formal cash tender with a cap is an event. The vendor headline "issuer to refinance" does not tell you which. Classification is the first control, then the competitive flag, then the cap.
Accrued on the exchanged portion is a separate credit. New notes have a new ISIN, a new coupon date, and a new factor if they were issued with a make-whole or a partial. The old ISIN that remains still pays on the old calendar. Mixing those two coupons is how a desk double-counts income, or misses it.