Regulation limits how much of the fresh issue can be allocated to general corporate purposes, because it is not tied to a defined project.
Monitoring agencies are appointed for larger issues to report on whether the money is used as stated.
An easy example
A company may allocate 38% to new facilities, 22% to repaying loans, 6% to working capital and the rest to general corporate purposes.
Important note
Debt repayment reduces interest costs, while capital expenditure aims to increase future capacity.
Common mistake
Ignoring a large general corporate purposes allocation, which is the least specific category.