best-efforts basis

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The offering was sold on a best efforts basis. Boustead Securities, LLC acted as the sole underwriter for the offering.
The contract has been signed to proceed, on a best efforts basis, with an offering of up to USD20,000,000 of series 1 preferred trust units of the Trust by way of an exempt market offering.
Riley, is acting as the underwriter on a best efforts basis. B.
Dawson James Securities is acting as the sole placement agent for the proposed offering on a best efforts basis.
as its agents, on a "best efforts basis," in connection with a proposed private placement of units.
This is true even where controlling shareholders have assented to proceed on a best efforts basis to ensure that the redemption would occur even though they may not have a legally enforceable right to force the corporation to effect the redemption.
The shares are being offered on a best efforts basis by authorized representatives of Bank of Botetourt to current shareholders of record and "street name" shareholders.
The subscription agent will attempt to sell the ineligible holders' rights held by the subscription agent, on a reasonable best efforts basis, from the extended deadline through June 26, 2009 at such prices determined by the subscription agent.
The shares are being offered on a best efforts basis by authorised representatives of Bank of Botetourt to current shareholders of record and 'street name' shareholders.

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