Advanced English Dialogue for Business – Negotiated underwritings

Listen to a Business English Dialogue about Negotiated underwritings

Walter: Hi Vanessa, have you ever participated in a negotiated underwriting before?

Vanessa: Hi Walter, yes, I have. Negotiated underwritings involve the issuer and underwriter agreeing on the terms of the offering before the securities are sold to investors.

Walter: That’s right. Unlike firm commitment underwritings, where the underwriter purchases the entire issue and then sells it to investors, negotiated underwritings allow for more flexibility in pricing and structuring the offering.

Vanessa: Exactly. In a negotiated underwriting, the issuer and underwriter work together to determine the offering price, the size of the offering, and other terms to ensure that the securities are sold successfully to investors.

Walter: Yes, and because the terms are negotiated beforehand, the issuer has more control over the process and can tailor the offering to meet their specific needs.

Vanessa: Right, negotiated underwritings are commonly used for larger offerings or by issuers with unique financing requirements that may not be suitable for a traditional firm commitment underwriting.

Walter: Absolutely. By working closely with the underwriter, issuers can ensure that the offering meets their objectives and is structured in a way that is attractive to investors.

Vanessa: Yes, and it also allows for a more efficient and cost-effective process, as the issuer and underwriter can streamline the due diligence and marketing efforts.

Walter: That’s correct. Overall, negotiated underwritings can be a beneficial option for issuers looking to raise capital while maintaining control over the offering process.

Vanessa: Definitely. It’s essential for issuers to carefully consider their financing options and work with experienced underwriters to navigate the complexities of the capital markets effectively.