Public offering

The company entering the unlisted sells its shares, bonds or other securities in the framework of a public offering.

The first question for a business that wants to raise funds from the capital market is whether it needs credit or equity financing, i.e. it would rather a bond or shares. After that, it must be decided whether the company will issue its papers in the framework of a private or public offering.

During the private issue, the papers are sold to a predetermined circle. Papers sold during the public offering can be subscribed, i.e. purchased, by any market participant.

Prior to the public issue, the financial advisor organizing the issue (usually a bank) prepares the issue prospectus, and also performs the organizational, management and information provision tasks related to the issue.

A public offering usually means unlisted. The common abbreviation for the first public capital market transaction in the life of the company is IPO (Initial Public Offering). 

Being on the stock market places high demands on the company: in the first place, you can only enter the unlisted above a certain size, in addition, you must operate transparently, and the public must be constantly informed about important events affecting the life and future of the company. The company is obliged to regularly publish its balance sheet and profit and loss statement, and it must also continuously provide information to investors and potential investors.

In the case of publicly issued debt securities (e.g. bonds), it is expected that the securities have a rating that indicates their risk classification. Each market determines which ratings are accepted by credit rating agencies. At the same time, the grades of the largest international credit rating agencies (e.g. Standard & Poor's, Moody's, Fitch Ratings) are accepted almost everywhere. Investment decisions are fundamentally influenced by the paper's rating.