New issue describes the initial admission of a security to exchange trading. In this context, securities are company shares, bonds or certificates. The issue of shares serves companies as a means to acquire equity capital, which is then used by the company. In contrast to this measure, companies may alternatively acquire outside capital through bank credits or the issuance of corporate bonds, which they must pay back at the end of maturity.
New issue may also describe the shares of a company being placed on the stock market for the first time within the scope of a capital increase or replacement. Before a company is admitted to exchange trading, it must fulfill a number of admission criteria, which vary according to the respective market segment.
Before the issue, investors can subscribe to the shares of a company during the subscription phase by placing a buy order. If – during this period – demand turns out to be higher than the available supply, the security is oversubscribed.