greenshoe

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Greenshoe Option

A provision in some underwriting contracts allowing the underwriter to sell more shares to investors than were originally agreed. In an underwriting agreement, the underwriter agrees with the issuer of a security to place a certain amount with investors. If demand for the security exceeds the underwriter's supply, the greenshoe option allows the underwriter to avoid a sudden jump in price by increasing supply. Normally, the greenshoe option allows the underwriter to increase supply up to 15%. It is important to note that not all underwriting contracts have greenshoe options, especially in situations in which the issue is for a limited project for which the issuer only needs a certain amount of capital. It is also called an overallotment option.

greenshoe

An underwriting agreement provision that permits syndicate members to purchase additional shares at the original offering price. Shares in the greenshoe may consist of additional shares from the issuing company or may come from existing shareholders as a secondary offering. For example, the 2002 IPO of CIT Group included 200 million shares plus a greenshoe of 20 million additional shares that could be purchased by syndicate members at the $23 offering price within 30 days. Also called overallotment option.
References in periodicals archive ?
Yes Bank had issued India's first-ever Green Infrastructure Bonds for INR10bn (USD160m) with green shoe option reportedly eliciting significant demand from global and domestic investors.
YES BANK had issued India's first-ever Green Infrastructure Bonds forINR 1000 crore (USD 160 million) with green shoe option that witnessed strong demand from leading global and domestic investors.
3 million) from the first tranche with a Green Shoe Option of KES 2 billion.
As an integrated utility company providing electricity to the key metropolitan city of Pakistan, KE is planning to issue Sukuk of Rs 22 billion (inclusive of a green shoe option of Rs 2 billion).
93 crore aggregating to over ` 3,400 crore but with the government not opting for the green shoe option, only ` 1,715 crore would come to the exchequer.
Ells of Vibram, gesturing toward rugged sandy and green shoe soles stacked next to a production line, where workers placed slabs of rubber into molds that pressed shut and slid into ovens.
We did not exercise the green shoe option," said a source on the sidelines of an SME conference and exhibition here yesterday.
In such a turn moiled stock market, a green shoe option can act as a guard against the wide fluctuations in the prices of the newly listed stock.
8 million inclusive of green shoe option of Rs 754.
She was caught wearing one green shoe and one red at the Golden Globes.
Carter raised a few eyebrows by attending the Golden Globe Awards this year wearing one red and one green shoe.
The underwriters have a green shoe option, which if exercised will increase the gross proceeds by up to $11.