Issuing bonds
Bonds
offer advantages to companies interested in raising capital, especially if a company has already made an
initial public offering
(IPO). That’s because a
secondary offering,
or issuing more shares of stock, could dilute, or reduce, the worth of shares already on the market.
For governments, at the local, state, and federal level, bonds are the only way to raise capital other than levying taxes. Your local government might float a bond to help pay for new construction or needed repairs, for example.
The differences are key
If a company decides to offer, or float, bonds, the procedure is in some ways similar to that for issuing stock. But bonds are fundamentally different from stocks as a means of raising capital since the investor becomes a creditor of the company, not an owner. And the company is taking a loan, not selling ownership. That makes the process of
floating
and purchasing bonds different from issuing and buying stock in key ways.
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Professor 
