Capital MarketsQuestion 360 of 398
A syndicate uses an 'all-or-none' (AON) underwriting arrangement. What does this mean?
a.The underwriter guarantees the entire issue will be sold
b.The offering is canceled and investors' money returned unless the entire issue is sold
c.Only accredited investors may participate
d.The issuer must repurchase all shares after one year
Explanation
In an all-or-none arrangement, a type of best-efforts underwriting, the entire issue must be sold or the offering is canceled and all funds are returned to investors. This protects the issuer from raising only a partial, insufficient amount of capital.
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