overallotment option

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.

overallotment option

See greenshoe.
References in periodicals archive ?
In addition, RBS will grant the underwriters an overallotment option to purchase up to an additional 11.
Remarks 1: If overallotment option is exercised, number of shares to be sold by Mitsui will be up to 4,025,000.
625% Convertible Senior Notes due 2020, which were issued in an offering that closed July 19, 2013, have elected to fully exercise their overallotment option for an additional $50 million in aggregate principal amount of the Notes.
NASDAQ: MITK) said that the underwriter of its previously announced public offering of common stock has exercised in full its overallotment option to purchase an additional 428,571 shares of common stock at the public offering price of USD5.
3% interest in Copa once the share sale is completed, or a 10% interest if the overallotment option is exercised in full.
TravelCenters of America LLC (NYSE MKT: TA) today announced that the underwriters of its public offering have exercised a portion of their overallotment option to purchase an additional $10 million of 8.
April 20 /PRNewswire/ -- Chatham Lodging Trust (the Company) today announced the full exercise of the underwriters' overallotment option to purchase an additional 1,125,000 of the Company's common shares of beneficial interest at the initial public offering (IPO) price of $20.
The Gabelli Natural Resources, Gold & Income Trust (NYSE:GNT) (the "Fund") has issued 2,008,811 common shares in conjunction with the exercise of the underwriters' overallotment option.
common stock following the partial exercise of the overallotment option by the underwriters of Telvent's initial public offering.
Pebblebrook Hotel Trust (NYSE:PEB) (the "Company") today announced the full exercise of the underwriters' overallotment option and the purchase of an additional 2,550,000 common shares at a public offering price of $17.
NAI") announced today that it agreed to sell, in concurrent underwritten offerings, 26,040,909 shares (plus an additional 2,604,091 shares if the underwriters exercise their overallotment option in full) of CBS class B common stock owned by NAI at a price to the public of $12.
New Century Financial Corporation (Nasdaq: NCEN) announced that the underwriters have elected to exercise their overallotment option to purchase an additional 525,000 shares of the Company's common stock.