Who is the Issuer?
The issuer is a company or a public corporation (for instance a municipality or a state) who issues securities above all for the purposes of financial gain for development of its business activities. Based on the type of the company or its interest, the issue can be in the form of different securities, out of which the most well-known ones are shares, bonds and participation certificates.
What are the Advantages of Acquiring Financial Resources in the Capital Market?
The capital market is one of the alternative sources of financing business development. The optimum choice of the source of financing depends on the actual entity and the specific situation.
Among the advantages of acquiring financing through securities listing are:
- The option of acquiring a large sum of money, that, for instance, one bank would not be able or willing to provide.
- The option of optimising the capital structure between debt and the net worth. By issuing the shares, the issuer increases its registered capital, or net worth, through current or new shareholders. By issuing bonds, the issuer temporarily gets access to foreign capital as well.
- When issuing certain types of securities, the issuer acquires cash without the need to pay loans or interest rates. That way, the company’s profit may be fully used for the development of the company.
The process of issuing securities is, in the eyes of the investors, the most transparent method. The listing of an issue in the regulated market is linked to certain publicity, which can significantly contribute to higher status and trustworthiness of the issuer.