backstopped deal

backstopped deal definition - finance
A type of underwriting deal in which the underwriter offers a firm commitment to purchase the companyÂ’s securities, thereby assuming the risk if the deal is poorly received by the market. The underwritersÂ’ fee is the spread, the difference between the price at which the securities were purchased from the com-pany and the price at which they were sold to the public. Also called firm-commitment underwriting or bought deal.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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