Module 4 · Chapter 9

Bookbuilding, the Subscription Agreement and Closing through Euroclear and Clearstream

The banks collect investors’ orders, fix the rate and sign a contract to buy the bonds. A few days later investors pay, and the bonds reach their accounts through the clearing systems.

≈ 7 min read 8-question test

In this chapter

  • How the Managers collect orders and fix the rate
  • What the subscription agreement promises, and the conditions attached to it
  • How investors pay and receive their holdings on closing, and what you check

9.1Selling the Notes in one paragraph

Selling a bond takes three steps. First the Managers collect orders from investors and fix the rate, which is called bookbuilding. Next they sign a contract with Valkenrade to buy the Notes. On the issue date, called closing, investors pay, and their holdings arrive in their clearing system accounts.

Key point

The price is fixed at signing, but nobody pays until closing. In between, the conditions in the contract decide whether the deal goes ahead.

Also in this chapter

  1. Building the book of orders
  2. Fixing the rate
  3. The subscription agreement and its conditions
  4. Closing: the global note and the clearing systems
  5. Your job

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