Bought Deal

Bought DealIn securities underwriting, a bought deal is an arrangement where (in contrast to best efforts) the entire bond or stock issue is bought (or a firm commitment is given) by a syndicate of investment bankers to ensure the sale of the entire issue in the shortest possible time. A new issue that a single underwriter purchases in order to place with investors. Most of the time, new issues are made through a syndicate of several underwriters. Likewise, most underwriters are reluctant to buy part of a new issue if they are unsure of how much demand there will be. Thus, an underwriter only agrees to a bought deal if they believe there will be a good deal of demand so that it can quickly re-sell the entire issue.