Issuers

An issuer is an entity that creates and sells financial instruments to raise capital or to provide financial instruments to the market. Issuers include sovereign governments, government agencies and municipalities, corporations, financial institutions, and central banks that issue currency. In securities markets, the issuer is typically the borrower or the entity offering equity or debt securities in the primary market. The issuer is legally responsible for the terms of the security, such as coupon or dividend payments, principal repayment, and any covenants, and must comply with applicable disclosure and regulatory requirements. The issuer’s creditworthiness influences pricing and affects investor risk.

Common types of issuers are governments issuing bonds, corporations issuing stocks and bonds, municipalities issuing municipal bonds, and supranational organizations issuing instruments. The issuer bears the obligation to service debt or deliver expected returns, and may be rated by credit agencies. Default risk, liquidity, and market conditions affect the cost of capital for the issuer. During a new issue, underwriters or investment banks may help structure and sell the securities, and prospectuses provide essential information to investors.

In payments, the term issuer also describes the issuing bank or entity that provides payment instruments such as credit or debit cards. The issuer maintains account records, approves transactions up to a limit, and settles with networks and merchants. Cardholders’ credit risk lies with the issuer, which may adjust limits, interest rates, and terms based on credit history and regulatory requirements.