best-efforts basis

(redirected from Best Efforts Underwriting)

Best-Efforts Basis

An agreement between an underwriter and an issuer in which the underwriter agrees to place as much of an offering with investors as possible, but is not responsible for any portion of the offering it fails to sell. For example, suppose an issuer makes a new issue of 100,000 shares. The issuer may make a best effort basis agreement with an underwriting firm for the underwriter to sell those shares to investors. If the underwriting firm only sells 90,000, however, it is not required to buy the remaining 10,000 from the issuer. This reduces the risk to the underwriter; to reduce the risk to the issuer, most best efforts are all-or-none offerings.

best-efforts basis

1. An agreement by an investment banker to do its best to oversee but not guarantee the sale of a security issue in the primary market. See also underwriter.
2. An investor's market order to buy or sell a security in which the brokerage firm agrees to obtain the best possible price.
References in periodicals archive ?
BSE: EVM; OTC Bulletin Board: ENVM) announced today that it has entered into a $3,500,000 best efforts underwriting agreement with Worthington & Dunn Securities, Inc.
com president and chief executive officer indicated that approximately $3 million was raised in a best efforts underwriting by the company.
OTC BB: TICE) (OTC BB: TICEW) today announced that it had signed a binding letter of intent with an outside investment group who will, in a best efforts underwriting, attempt to raise for the Company's use approximately $1.
Finally, Struthers' acquisition of WIN-TV is contingent upon a $30 million best efforts underwriting commitment to WIN-TV which is already in place.
a subsidiary of Struthers; c) a best efforts underwriting commitment to WIN-TV for $30 million, which is now in place; and, d) a reverse 1-for-3 stock split.