Issue
Candlefocus EditorDebt securities, more commonly known as bonds, offer investors a fixed return on their investment. Bond issues are often used as an alternative to seeking loans from banks to finance large projects. Premium bonds are the most common type of debt security issued. These bonds typically have a face value that is the same as their issue price, and the holder will receive semi-annual or annual interest payments on the face value of the bond.
Equity securities, or stocks, represent ownership of a particular portion of a company or government entity. Equity issues are attractive to investors because they are in a continuous upward trajectory and are typically riskier than other types of investments. When a company issues new stock, its current shareholders face potential dilution. As additional stock is issued, the existing stocks become more difficult to trade since the total number of shares has increased and are therefore spread more thinly across each stockholder.
Issues of any kind of securities can be very complicated, and should never be done without the assistance of experienced professionals. In addition to handling the actual sale of the securities, these advisors will also be able to provide guidance on tax considerations, pricing and disclosure. Additionally, due Diligence of the issuer is essential before investors commit capital to an issue.
Overall, issues are an important part of raising capital for businesses and government entities. As a result, it's important for investors to understand the risks and potential rewards associated with issuance of securities and to seek the guidance of a professional when investing in any kind of issue.