easy · Debt Capital Markets
Why would a bank *refuse* to do a 'bought deal' and insist on 'best-efforts' for a company with a 'Caa1' rating in a recession?
- The SEC forbids bought deals for any company rated below B.
- The risk of a 'failed' syndication is too high, and the bank does not want to be stuck with risky debt it cannot sell.
- The bank wants to ensure the issuer pays the lowest possible fee.
- Best-efforts deals are more prestigious for the bank's brand.
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