Legal Definitions - issuance

An issuance refers to the process where a company, government, or other entity creates and offers new financial instruments, such as stocks or bonds, for sale to investors. The primary purpose of an issuance is to raise capital directly for the entity that created the securities. When an issuance occurs, the funds generated from the sale go directly to the issuing entity, distinguishing it from situations where existing securities are sold by current owners. This process is also known as a primary offering.

Examples:

• A renewable energy startup needs funding to build its first large-scale solar farm. To secure the necessary capital, the company decides to create and sell new shares of its stock to the public through an investment bank.
  This is an issuance because the startup is creating and selling brand new shares (securities) to investors, and the money raised goes directly to the company to fund its project.
• A well-established university plans to construct a new research facility and student dormitory complex. To finance this significant expansion, the university decides to sell new bonds directly to a consortium of large institutional investors, such as pension funds and insurance companies.
  This represents an issuance because the university is creating and selling new bonds (securities) to raise capital for its building projects, with the proceeds going directly to the university.
• A national government requires substantial funds to upgrade its aging public transportation infrastructure across several major cities. To achieve this, the government announces it will be selling new treasury bonds to both domestic and international investors.
  This is an issuance because the government is creating and selling new bonds (securities) to raise money for its infrastructure initiatives, and the funds are received directly by the government.