New Issue

Any offering of stock by a publicly-traded company. 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 makes a new issue through underwriters, who have the responsibility to place the offering with individual and institutional investors. Companies make new issues in order to raise financing for expanded operations, or because they have become cash poor and need to finance their current operations. The offerings themselves give investors a portion of ownership in the company issuing them.

float an issue

To sell a security issue in the primary market. For example, a firm may decide that it needs to expand its manufacturing facilities and float a new issue of common stock to pay for the expansion. Issuers generally employ an investment banker to assist in floating an issue.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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Floating an issue

References in periodicals archive

A company with good ratings from agencies like S&P will find it easier to float an issue because the interest cost won't be too high.

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