easy · Debt Capital Markets primary-issuance-syndication

A bank is 'pitching' a bought deal to a client. The client asks: 'What happens if the book is only 0.5x covered at our target price?' The bank's response in a bought deal is:

1. 'We still pay you the full amount at the agreed price and take the unsold bonds into our own inventory.'
2. 'We cancel the deal and you don't get any money.'
3. 'We will automatically lower your coupon to attract more buyers.'
4. 'You have to pay us an extra 2% fee to find more investors.'

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