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In finance, “issue” refers to the process of offering new securities for sale to the public or to private investors. Securities could be stocks, bonds, or other financial instruments. The purpose of issuing securities is to raise capital in order to finance business operations or expansions.


The phonetic pronunciation of the word “issue” is /ˈiSHo͞o/.

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    The term “issue” is vital in business and finance as it refers to the process of offering securities in order to raise funds. It could be shares, bonds, or other financial instruments, which are issued by corporations, institutions, or governments. Businesses might issue shares, for instance, to gather capital for various operational needs, expansion, or clearing off existing debt. On the other hand, governments often issue bonds to fund public projects. Hence, understanding the concept of “issue” is crucial in financial decision-making, investment strategies, and for discerning the overall state of the economy. It not only impacts the issuer but also the investors, as it determines their investment returns.


    In finance/business, the term “issue” typically refers to the process by which a company releases securities like stocks, bonds, or other financial instruments to raise necessary capital for business expansion, paying off debt, or financing ongoing operations. This issuance of securities helps companies generate funds without taking out loans or incurring additional debt. The purpose of the issuance process is to facilitate the company’s growth and expansion strategies by accessing funding from external investors rather than relying purely on retained earnings or internal resources.Investors purchase these issued securities with the hope or expectation that the company will grow and prosper over time, providing a return on the investment through dividends, interest, or an increase in the value of the security. Therefore, issuing securities also serves as a means for wealth creation for investors. It forms part of the grander scheme in finance called capital markets, where buyers and sellers engage in the trade of financial securities. Overall, the concept of “issue” underscores the relationship between companies seeking funds for various purposes and investors looking for opportunities to grow their wealth.


    1. Initial Public Offering (IPO): Perhaps one of the most well-known examples of an issue in the business/finance world is when a company decides to go public. This process involves issuing shares of the company to the public for the first time through the stock market. A recent example is the IPO of Airbnb in December 2020, where the company issued its shares to raise funds for its growth and expansion plans. 2. Bond Issue: Governments or corporations often issue bonds to raise funds for various projects or to refinance existing debt. For instance, in September 2021, Apple Inc. issued bonds worth $6.5 billion in a four-part deal, with maturities ranging from five years to 30 years, to help fund their general corporate expenses, including the repayment of prior debt.3. Rights Issue: Sometimes, a company may need to raise additional capital and they can do so by issuing new shares to their existing shareholders. For example, in September 2020, Rolls-Royce announced a rights issue, seeking to raise $2.6 billion from shareholders to survive the global downturn triggered by the COVID-19 pandemic. In a rights issue, current shareholders are offered the right, but not the obligation, to buy new shares often at a discounted price compared to the current market price.

    Frequently Asked Questions(FAQ)

    What is an ‘Issue’ in finance or business?

    An ‘Issue’ in finance and business refers to the issuance or offering of securities by a corporation or governmental entity to raise capital. It includes shares, bonds, and other financial instruments that are offered for sale.

    What is a ‘Rights Issue’?

    A ‘Rights Issue’ refers to a special type of issue, where a company offers additional shares to existing shareholders, proportional to their current shareholding. This is typically done to raise new capital without incurring additional debt.

    How does an ‘Issue’ impact shareholders?

    An ‘Issue’ can dilute the value of existing shares if the company issues more shares, but it can also bring more capital into the business, which could lead to growth and increased share value over time.

    What are ‘Primary’ and ‘Secondary’ issues?

    A ‘Primary’ issue refers to the first time securities of a company are offered to the public, such as an initial public offering(IPO). A ‘Secondary’ issue happens when more shares are issued by a company that has already gone public.

    How does a company decide to issue securities?

    The decision to issue securities can be influenced by several factors such as the financial health of the company, growth opportunities, and market conditions. This decision is typically made by the company’s board of directors.

    Is there any regulatory oversight in terms of a securities ‘Issue’?

    Yes, regulatory bodies such as the Securities and Exchange Commission (SEC) in the United States have established rules and regulations that companies must follow when issuing securities. This is done to protect investors and maintain a transparent and equitable financial system.

    What are the costs associated with issuing securities?

    Costs can include underwriting fees, legal fees, registration fees, and other expenditures related to the preparation and distribution of the offering prospectus. It can also involve ongoing costs related to meeting regulatory requirements.

    What is a ‘Bond Issue’?

    A ‘Bond Issue’ is when a company, municipality, or government raises money by selling bonds to investors. The issuer of the bond is obligated to pay the holder of the bond the interest and return the principal on a specified maturity date.

    How are the prices of securities determined during an ‘Issue’?

    The price of a security during an ‘Issue’ can be influenced by various factors, including the financial health of the company, current market conditions, investor perception, and potential return on investment. In an Initial Public Offering (IPO), an underwriter will often help determine the initial price of the security.

    : What happens in the event of an ‘Over-Issue’?

    : ‘Over-Issue’ refers to the issuance of more shares than what was initially authorized by the company’s charter. Typically, this is not allowed, and any discrepancies must be fixed by the company either through a reverse split or by obtaining shareholder approval to increase the number of authorized shares.

    Related Finance Terms

    • Securities Offering
    • Initial Public Offering (IPO)
    • Capital Increase
    • Debt Issuance
    • Equity Issuance

    Sources for More Information

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