Floating an Issue

Floating an Issue

The act or practice of a publicly-traded company offering stock or bonds to investors. In stock, if it is the first such offering, it is called an initial public offering (IPO); otherwise, it is called a follow-on offering. A company floats an issue through underwriters, who have the responsibility to place the offering with individual and institutional investors. Especially in bonds, a company may also elect to hold an auction for the securities. Companies float new issues in order to raise financing for expanded operations, or because they have become cash poor and need to finance their current operations.

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Floating an issue. When a corporation or public agency offers new stocks or bonds to the public, making the offering is called floating an issue.

In the case of stocks, the securities may be an initial public offering (IPO) or additional issues of a company that has already gone public. In that case, they're called secondary offerings.