What is a new issue? What is a bought deal?

  • New issue: A company issues securities from its own treasury to raise equity capital in the marketplace. If the company is issuing securities for the first time, this is called an “Initial Public Offering”.
  • Bought deal:In the conventional underwriting, the underwriter sells securities of an issuer to the public. In a bought deal, a bought deal underwriter commits to buy a specific number of securities at a set price and then resells those securities to the public.