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What does this Practice Note cover?

This Practice Note outlines the role of the entities acting as underwriters or managers in an issuance of debt securities in the capital markets. It provides an overview of underwriting and managers' responsibilities, a description of the key transaction documents to which they are typically a party and a summary of certain risks faced by managers in an offering of debt securities.

What is underwriting and why are securities issuances typically underwritten?

The term ‘underwriting’ refers to a commitment to subscribe for or purchase securities that are not able to be sold to investors or to be paid for by investors in a securities offering. By making such a commitment, an underwriter assumes the risk from the issuer that the securities being offered will not be taken up by investors. The underwriter, therefore, effectively guarantees the issuer, subject to certain conditions, the number of securities that will be sold and the amount of proceeds the issuer will receive.

The entities acting as underwriters on a securities