Bought deal (also used in German, more rarely issue purchase and firm underwriting)

Generally, the acquisition of an issue by one or two buyers (security issue where one or two underwriters buy the entire issue). – In particular: a bond is fully underwritten by the lead bank (the lead manager, arranger). The issuing bank thus fully assumes the risk of failure. – However, this is usually countered by the fact that market conditions are very favorable at the moment and therefore urgency is required; the individual terms of the issue can therefore not be discussed in time-consuming negotiations with the members of a syndicate. It is only now, i.e. after the issue, that the division – the syndication – takes place. – A bank makes an offer to a customer for a very short time – usually only twenty-four hours – to take over papers with a sweet. – See equity market, arranger, expense premium, issuance, bookbuilding, bookrunner, club deal, deal, underwriting participation, underwriting, underwriting house, underwriting yield, initial purchaser, guaranteed syndicate, investment banking, intercreditor agreement, client effect, concert underwriter, market maintenance, meta-link, pre-marketing, roadshow, secondary offering, tap, underwriter, securities underwriting, securities offering prospectus, listing agent, secondary offering.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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