Definition of rights issue

Rights Issue Image 1

rights issue

issue of securities offered only to current stockholders.

Related Terms:

Oversubscription privilege

In a rights issue, arrangement by which shareholders are given the right to apply
for any shares that are not taken up.

Standby agreement

In a rights issue, agreement that the underwriter will purchase any stock not purchased by investors.

With rights

Purchase of shares in which the buyer is entitled to the rights to buy shares in the company's
rights issue.

Appraisal rights

A right of shareholders in a merger to demand the payment of a fair price for their shares, as
determined independently.

Benchmark issues

Also called on-the-run or current coupon issues or bellwether issues. In the secondary
market, it's the most recently auctioned Treasury issues for each maturity.

Cheapest to deliver issue

The acceptable Treasury security with the highest implied repo rate; the rate that a
seller of a futures contract can earn by buying an issue and then delivering it at the settlement date.

Current issue

In Treasury securities, the most recently auctioned issue. Trading is more active in current
issues than in off-the-run issues.

Dividend rights

A shareholders' rights to receive per-share dividends identical to those other shareholders receive.

Dual-currency issues

Eurobonds that pay coupon interest in one currency but pay the principal in a different
currency.

Euroequity issues

Securities sold in the Euromarket. That is, securities initially sold to investors
simultaneously in several national markets by an international syndicate. Euromarket.
Related: external market

Ex-rights

In connection with a rights offering, shares of stock that are trading without the rights attached.

Ex-rights date

The date on which a share of common stock begins trading ex-rights.

Issue

A particular financial asset.

Issued share capital

Total amount of shares that are in issue. Related: outstanding shares.

Issuer

An entity that issues a financial asset.

Liquidation rights

The rights of a firm's securityholders in the event the firm liquidates.

Multiple-issuer pools

Under the GNMA-II program, pools formed through the aggregation of individual
issuers' loan packages.

New-issues market

The market in which a new issue of securities is first sold to investors.

Original issue discount debt (OID debt)

Debt that is initially offered at a price below par.

Oversubscribed issue

Investors are not able to buy all of the shares or bonds they want, so underwriters must
allocate the shares or bonds among investors. This occurs when a new issue is underpriced or in great demand
because of growth prospects.

Presold issue An issue

that is sold out before the coupon announcement.

Property rights

rights of individuals and companies to own and utilize property as they see fit and to receive
the stream of income that their property generates.

Reopen an issue

The Treasury, when it wants to sell additional securities, will occasionally sell more of an
existing issue (reopen it) rather than offer a new issue.

Rights offering

Issuance of "rights" to current shareholders allowing them to purchase additional shares,
usually at a discount to market price. Shareholders who do not exercise these rights are usually diluted by the
offering. rights are often transferable, allowing the holder to sell them on the open market to others who may
wish to exercise them. rights offerings are particularly common to closed end funds, which cannot otherwise
issue additional common stock.

Rights-on

Shares trading with rights attached to them.

Seasoned issue

issue of a security for which there is an existing market. Related: Unseasoned issue.

Seasoned new issue

A new issue of stock after the company's securities have previously been issued. A
seasoned new issue of common stock can be made by using a cash offer or a rights offer.

Secondary issue

1) Procedure for selling blocks of seasoned issues of stocks.
2) More generally, sale of already issued stock.

Small issues exemption

Securities issues that involve less than $1.5 million are not required to file a
registration statement with the SEC. Instead, they are governed by Regulation A, for which only a brief
offering statement is needed.

Special drawing rights (SDR)

A form of international reserve assets, created by the IMF in 1967, whose
value is based on a portfolio of widely used currencies.

Specific issues market

The market in which dealers reverse in securities they wish to short.

Unseasoned issue

issue of a security for which there is no existing market. See: seasoned issue.

Vanilla issue

A security issue that has no unusual features.

Voting rights

The right to vote on matters that are put to a vote of security holders. For example the right to
vote for directors.

Issued shares

The number of shares that the company has sold to the public.

Issue date

The date a security is first offered for sale. That date usually
determines when interest payments, known as coupons, are made.

Unissued stock

Stock that has been authorized for use, but which has not yet been
released for sale to prospective shareholders.

issued shares

Shares that have been issued by the company.

Uniformed Services Employment and Reemployment Rights Act of 1994

A federal act that minimizes the impact on people serving in the Armed Forces
when they return to civilian employment by avoiding discrimination and increasing
their employment opportunities.

Emerging Issues Task Force (EITF)

A special committee of the Financial Accounting Standards Board established to reach consensus of how to account for new and unusual financial transactions that have the potential for creating differing financial reporting practices.

Emerging Issues Task Force (EITF)

A separate committee within the Financial Accounting Standards Board composed of 13 members representing CPA firms and preparers of financial statements
whose purpose is to reach a consensus on how to account for new and unusual financial transactions
that have the potential for creating differing financial reporting practices.

Inventory issue

A transaction used to record the reduction in inventory from a location,
because of its release for processing or transfer to another location.

Issue

When an item is approved and released for sale, or when a policy or sales contract is accepted.

Issue Age

Age of an insured as at the policy issue date, using "age nearest" next birthday formula.

Issue Date

Date on which a policy is approved.

Bond indenture

The contract that sets forth the promises of a corporate bond issuer and the rights of
investors.

Indenture

Agreement between lender and borrower which details specific terms of the bond issuance.
Specifies legal obligations of bond issuer and rights of bondholders.

qualified investments (Canada)

Qualified investments is the term used for investments that can be held in an RSP. These investments generally include:
Canadian dollar savings accounts, guaranteed investment certificates, term deposits
shares of Canadian and foreign companies listed on a prescribed stock exchange
shares of some over-the-counter U.S. and Canadian companies
shares of some small businesses
certain types of bonds and money-market investments such as treasury bills, Canada Savings Bonds, Government of Canada bonds, provincial government bonds, Crown Corporation bonds, bonds issued by Canadian corporations listed on a prescribed stock exchange, and certain strip bonds
certain types of mortgages, including your own
certain covered call options, warrants and rights
certain mutual funds

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