A Best Effort Arrangement is a method used by investment bankers, acting as agents, to sell a new issue to the public without actually buying the securities outright. These bankers have the option to buy the securities, but their primary responsibility is to use their best efforts to sell the issue on behalf of the issuer.
A method of raising capital where a company sells new shares to an underwriter, who then resells them to the market.
Banks that rank after lead managers in marketing a new issue, usually a Eurobond. They are typically chosen for their ability to place a substantial portion of the issue with their customers.
Eurodollars refer to U.S. dollars deposited in financial institutions outside the United States. The eurodollar market originated in London in the late 1950s, driven by the growing demand for dollars to finance international trade and investment.
In securities underwriting, a firm commitment is an arrangement whereby investment bankers make outright purchases from the issuer of securities to be offered to the public. This arrangement is also known as firm commitment underwriting.
Floating an issue refers to the process by which a company issues new securities to the public in order to raise capital. This process involves several steps, including registering the securities with regulatory bodies and underwriting the issue.
The process through which a private company offers its shares to the public for the first time, transforming into a publicly traded company.
Investment banking encompasses a range of financial services focused on serving large corporations, public bodies, and investors, distinguishing itself from retail or commercial banking by not directly involving individual depositors.
A killer bee is an investment banker who devises strategies to assist businesses in resisting predatory takeover bids by making the target company appear less attractive.
A placed deal is a financial transaction in which a bank or a group of banks commit to marketing an entire new issue of bonds or similar securities without guaranteeing the success of the issuance.
The market where new issues of securities are initially sold to investors. It contrasts with the secondary market where existing securities are traded among investors.
A private issue, also known as a private placement, refers to the sale of securities to a relatively small number of chosen investors as a way of raising capital.
A secondary distribution refers to the public sale of previously issued securities held by large investors, such as corporations, institutions, or affiliated persons, rather than a new issue where the seller is the issuing corporation.
A tombstone ad is an advertisement placed in newspapers by investment bankers during a public offering of securities. It provides basic details about the issue and lists the underwriting group members involved in the offering in alphabetical groupings according to the size of their participation.
The difference between the amount paid to an issuer of securities in a primary distribution and the public offering price. It varies based on issue size, issuer's financial strength, security type, security status, and investment bankers' commitments.
Wall Street is synonymous with the financial markets and institutions of New York, housing the New York Stock Exchange and being the hub of major financial activities in the United States.
A 'White-Shoe Firm' is an anachronistic term originating from the 1950s Ivy League culture, typically used to describe venerable, elite, and reputable broker-dealers known for their conservative business practices.
