Prospectus

Equity Capital Markets

from Capital Markets

An initial public offering (IPO) is the process by which a private company lists its shares on a stock exchange for the first time. The company appoints underwriters (investment banks) who commit to buying any unsold shares, guaranteeing the fundraise. A detailed prospectus must be prepared and approved by the FCA, disclosing the company's business, financials, risks, and management. The bookbuilding process gauges investor demand at various price points before the final offer price is set. Beyond IPOs, listed companies may raise additional equity through rights issues (offering existing shareholders new shares pro rata) or placings (selling new shares to institutional investors).

Debt Capital Markets

from Capital Markets

Instead of selling ownership, companies can raise funds by issuing bonds — debt instruments that promise to pay investors a fixed or floating coupon (interest rate) and return the principal at maturity. Investment-grade bonds are issued by highly rated borrowers and carry lower yields, while high-yield bonds (often called junk bonds) offer higher returns to compensate for greater credit risk. Bonds may be listed on exchanges like the London Stock Exchange or traded over-the-counter. The documentation — typically an offering circular or prospectus — is heavily negotiated, with covenants restricting what the issuer can do (e.g., limits on further borrowing or asset disposals) to protect bondholders.