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Issuer: Issuer of securities and their importance

An issuer is aIssuer of securities. In most cases, these are companies or institutions that act as issuers of securities. These securities can be purchased and traded by investors.

Different types of issuers

Anyone who issues securities is called the issuer. These do not necessarily have to be traded on the stock exchange. In general, not only companies can act as issuers, but alsoInstitutions and countries. For example, the federal government issues government bonds and counts as an issuer.

Types of securities and their issuers

Most of the time, when you think of an IPO, you think of stocks. In fact, an issuer is free to decide which types of securities to issue. The following types of securities are possible: stocks, bonds, warrants or certificates. Other trading products on the stock exchanges are subject to special forms, such as funds. In this case, the issuer is not a company, since an investment fund is a collection of various investment papers, but a capital management company.

How does a company become an issuer?

The initial public offering of a company that is not yet listed is known as an IPO. The reasons for an IPO can be varied, but in most cases they depend on theRaising capital together. Through the investment of the investors who purchase the company's securities (technical term: subscribe), fresh capital is flushed into the company's coffers. But there are also other aspects that speak in favor of an IPO. The following intentions are common in an IPO:

  • Financing of expansions and innovations
  • Covering growth-related equity requirements
  • Improved creditworthiness and thus an improved credit rating
  • Strengthening the brand and increasing awareness
  • Increasing the attractiveness for investors, customers, employees

The IPO

The path to issuing the securities is lengthy and requires intensive preparation time. In order to list a company on the stock exchange, it musthave existed for at least three years and have the legal form of a stock corporation (AG), European company (SE) or partnership limited by shares (KGaA). In addition, aExamination of maturity for the stock market performed. The company also needs a bank that is ready to support the IPO. This is followed by several negotiation steps in which not only the transaction conditions are determined, but also the legally binding stock market prospectus is drawn up and, last but not least, the target issue price is calculated. In addition, various marketing measures are used to advertise the upcoming IPO among future investors.

The subscription period begins before the correct listing takes place. In this, investors can purchase the new securities. Depending on the demand, this results in the final oneIssue price of the securities. Only when this step is completed does the company actually go public, in which the securities can be freely traded from this point in time. The issue price starts as the so-called initial listing of the company's share price.

One-time issuers and regular issuers

After the initial issue it is possible to issue further securities. For example, when capital is needed again for new projects. Then he canIssuer reissue securities. Depending on the frequency of these emissions, the terms single issuer (only a single issue) and continuous issuer (regular emissions) have become established. For example, the federal government issues bonds on a permanent basis and counts as a regular issuer. A special form are companies that issue securities again a considerable time after their IPO. You will often likeNew issuers treated and received increased attention from banks, investors and the media.