What is New issue? What is 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 “Initial Public Offering”.
  • Bought deal:In the conventional underwriting, the underwriter sell 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 resell those securities to the public.