easy · Debt Capital Markets primary-issuance-syndication
In a 'Best-Efforts' deal, the 'Initial Price Thoughts' (IPTs) are released at 250 bps. During the day, the market weakens and investors demand 300 bps.
What is the most likely result?
- The bank must itself pay the 50 bps annual spread difference to the investors every year.
- The deal prices at 300 bps, or the issuer decides to withdraw the deal if 300 bps is too expensive.
- The investors who first saw the IPTs are now legally bound to accept the original 250 bps spread.
- The bank's CEO must personally step in and guarantee the original 250 bps spread to the buyers themselves.
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