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Security issue in which one or two underwriters buy the entire issue. Also known as a guaranteed or fixed-price sale; opposite of a best-efforts sale.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A new issue that a single underwriter purchases in order to place with investors. Most of the time, new issues are made through a syndicate of several underwriters. Likewise, most underwriters are reluctant to buy part of a new issue if they are unsure of how much demand there will be. Thus, an underwriter only agrees to a bought deal if it believes there will be a good deal of demand so that it can quickly re-sell the entire issue.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
See firm commitment.
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.