What is Seasoned Issue?
Definition of Seasoned Issue
A company whose securities are already traded in the secondary market issues new securities. Seasoned issue is also known as “seasoned equity offering”.
Explanation of Seasoned Issue
A seasoned new issue of common stock can be made using a cash offer or a rights offer. Underwriting firms handle the seasoned issues just like they handle initial public offering. The only difference is that the price of the new shares is based on the market price of the outstanding shares. Seasoned issues can be perceived as the company is having financial problems that may result in the down fall of share prices.