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Simple English definitions for legal terms
issuance
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A quick definition of issuance:
An issuance is when a company creates and sells new stocks or bonds to raise money. This is also called a primary offering. The company can sell these new securities to the public or to private investors. The company gets the money from the sale of these securities, unlike in a secondary offering.
A more thorough explanation:
An issuance is when a company offers new securities to the public or private investors. This is also known as a primary offering. The company can receive money from the sale of these securities, which is different from a secondary offering.
- A company decides to go public and offers shares of stock to the public for the first time. This is an example of a primary offering or issuance.
- A startup company needs funding and decides to offer shares of stock to a group of private investors. This is also an example of a primary offering or issuance.
Both examples illustrate how a company can offer new securities to raise money. In the first example, the company is offering shares of stock to the public through an initial public offering (IPO). In the second example, the company is offering shares of stock to private investors through a private placement. In both cases, the company is receiving money from the sale of these securities, which is why it is called a primary offering or issuance.