When a company issues new shares to raise capital, it typically occurs during what type of offering?

When a company issues new shares to raise capital, it typically occurs during a seasoned offering. A seasoned offering refers to the issuance of additional shares by a company that is already publicly traded. This is distinct from an initial public offering (IPO), where the company is first offering shares to the public, and it encompasses existing public companies that are looking to raise further capital by issuing new shares.

In a seasoned offering, the company has already established a presence in the market and is expanding its equity base, often to fund growth, pay down debt, or improve its financial position. This is a critical way for companies to access additional funds while providing depth to their existing shareholder base. The market's existing knowledge of the company's performance can facilitate this process, as investors may be more informed about the company's potential, aiding in the capital-raising effort.

Although private placements and secondary offerings are also methods of issuing shares, they serve different purposes. A private placement involves selling securities to a select group of investors and typically does not require the same level of disclosure as public offerings. A secondary offering usually refers to the sale of existing shares that large shareholders, like company insiders or venture capitalists, sell, rather than the issuance of new shares to raise funds for the company itself