medium · Debt Capital Markets primary-issuance-syndication

In the context of a 'Bought Deal,' why is the Underwriting Fee typically higher than in a 'Best Efforts' deal?

1. Because the bonds are always issued at a premium
2. Because the banks bear the risk of an adverse market move before placement
3. Because the issuer is required to pay for the banks' legal fees separately
4. Because the banks are providing more marketing materials

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