what is a new issue 
a new issue refers to a stock or bond offering that is made for the first time most new issues come from privately held companies that become public presenting investors with new opportunities the typical route for a new issue via a stock offering is known as an initial public offering ipo where a company s stock is offered to the public through various exchanges such as the new york stock exchange nyse or nasdaq for the first time new issues of bonds work the same way both forms of new issues are intended to raise capital for the issuing company a new issue may be contrasted with a seasoned issue understanding a new issuea new issue is conducted as a means of raising capital for a company firms have two main choices issuing debt i e borrowing or issuing equity in the form of stock i e selling a portion of the company regardless of which route they take they will be making a new issue when those securities are offered for sale governments will also create new issues of sovereign debt in the form of treasury securities in order to raise funds for government operations using the debt route i e issuing bonds the new issue will be scrutinized based on the creditworthiness of the issuer to repay its obligations and its overall financial strength if the firm is a startup with no revenue issuing bonds may be an option that is not readily available there is a risk of hype around a new issue sometimes causing a company s shares to surge after its ipo and then only plummet after the hype has worn off investors need to be careful when investing in new issues however the stock route may still be available if they are able to convince investors that the company has long term potential this is where venture capital vc and private equity firms may become involved helping the company to develop and thrive in exchange for ownership in the new firm if successful the company may then seek to make a new issue through an ipo and go public companies that are already public may originate another new issue later on via a secondary offering example of a new issuesay a new it company has developed a program to make cash exchanges easily available worldwide it has been successful in both generating revenues and garnering interest from the venture capital community to grow however it believes it needs more capital approximately 30 million which it doesn t have on hand as such it needs to raise this capital through external sources the company engages with investment banks to see what their shares could be worth on the open market and the banks underwriters indicate that 19 per share would be a fair ipo price valuing the company at just under 100 million the company s board of directors agrees to list shares of the company and they file for an ipo to release a number of shares worth half the total valuation so 50 million with the new issue the company raises capital and becomes listed on a stock exchange where its shares are freely tradeable the new issue resulted in the company raising 50 million slightly more than the 30 million they estimated that they needed for growth because the company did not list all of its shares it still has retained a significant portion of ownership 