This gives the investor the right to buy a company's shares within a certain time at an attractive price. Most bonds are rated by credit rating agencies that assess the borrower's ability to repay debts. Bondholders generally stand in front of shareholders in any claim on the assets of a corporation when a company is in financial difficulty. The underwriter would use its best efforts to sell the full amount of the issue, but there were no guarantees. A bought deal means the investment dealer buys all of the new shares, guaranteeing the total return to the issuer.
Dealers command higher fees or commissions by taking on the risk of the success of the underwriting.
A general term for an investment dealer. Historically, this term means an agent who acts for the buyer or seller and collects a commission for brokering a transaction. CanWest Global Communications Corp. All rights reserved. Optimized for browser versions 4.0 and higher.