Seasoned Issue


DEFINITION of 'Seasoned Issue'

An issue of additional securities from an established company whose securities already trade in the secondary market. A seasoned issue is also known as a "seasoned equity offering" or "follow-on offering." New shares issued by blue-chip companies are considered seasoned issues. Outstanding bonds trading in secondary markets are also called seasoned issues.

BREAKING DOWN 'Seasoned Issue'

Seasoned issues are handled by underwriting firms in much the same way as initial public offerings, except that the price of the new shares is based on the market price of the outstanding shares. Investors may construe a seasoned issue as a sign that a company is having financial problems. This news can cause the price of both the outstanding shares and the new shares to fall.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Security

    A financial instrument that represents an ownership position ...
  3. Halted Issue

    A planned security offering that does not go forward as planned. ...
  4. Blue Chip

    A nationally recognized, well-established and financially sound ...
  5. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
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  1. What is the difference between an IPO and a seasoned issue?

    When a privately owned organization decides to raise capital by offering shares of stock or debt securities to the public ... Read Full Answer >>
  2. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  3. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
  4. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
  5. How do I place a buy limit order if I want to buy a stock during an initial public ...

    During an initial public offering, or IPO, a trader may place a buy limit order by choosing "Buy" and "Limit" in the order ... Read Full Answer >>
  6. How do corporate actions affect floating stock?

    Corporate actions, defined as a company's actions that affect the amount of outstanding company stock shares, can either ... Read Full Answer >>

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