Offering costs are those expenditures made to pay for the accounting, legal and underwriting activities associated with the issuance of securities to investors. Other offering costs cover the printing of prospectuses, exchange listing fees, registration fees, and initial credit rating agency fees (if an offering involves the sale of bonds). Offering costs can be so substantial that they make it impossible for a smaller entity to issue securities.

Offering costs can vary dramatically, depending the size of the security issuance, the type and complexity of the offering, the regions in which the securities are being sold, and the ability of the issuer to drive down the fees charged. A large and frequent issuer of securities does enough business with underwriters to drive a harder bargain on fees than a smaller and more infrequent issuer.