Listen to a Business English Dialogue About Agreement among under writers
Christian: Claire, have you heard of the term “Agreement Among Underwriters” in finance?
Claire: No, what is it?
Christian: It’s an agreement between investment banks who underwrite a securities offering, outlining their responsibilities and how they’ll share the risks and profits.
Claire: Oh, so it’s like a contract that sets out the terms for underwriting a securities offering?
Christian: Exactly, it helps ensure that the underwriters work together smoothly to bring the offering to market.
Claire: Are there any specific clauses or provisions typically included in these agreements?
Christian: Yes, they usually specify the underwriters’ obligations, the allocation of shares, and how any unsold securities will be distributed.
Claire: I see. So, it’s important for underwriters to have a clear understanding of their roles and responsibilities?
Christian: Absolutely, it helps prevent misunderstandings and ensures that the offering is managed efficiently.
Claire: Can you explain how the underwriters share the risks and profits?
Christian: Typically, each underwriter agrees to purchase a certain portion of the securities and shares in both the risks and profits based on their allocation.
Claire: Got it. So, they’re all in it together when it comes to managing the risks and rewards?
Christian: Exactly, it’s a collaborative effort to ensure the success of the securities offering.
Claire: Thanks for explaining, Christian. It’s interesting to learn about the inner workings of underwriting agreements.
Christian: No problem, Claire. Understanding these agreements is crucial for anyone involved in the securities industry.