Investment Banking Glossary

An increase in a company's earnings per share resulting from an acquisition or merger.

The role of the lead underwriter in a securities offering, responsible for managing the order book, pricing, and allocation.

Short-term financing provided to bridge the gap until permanent financing or the next round of capital is secured.

The group of the largest and most profitable global investment banks that handle the biggest deals.

Financial markets where long-term debt or equity-backed securities are bought and sold, facilitating capital allocation.

A bond that can be converted into a predetermined number of the issuing company's equity shares.

A clause in a debt agreement requiring the borrower to meet certain financial conditions or restricting certain activities.

A reduction in existing shareholders' ownership percentage caused by the issuance of new shares.

The partial or full disposal of a business unit, subsidiary, or asset through sale, exchange, or closure.

Analysis and reports produced by sell-side analysts covering publicly traded companies, providing recommendations and price targets.

An independent assessment of whether the financial terms of a proposed transaction are fair to shareholders.

An over-allotment option allowing underwriters to sell up to 15% more shares than originally planned in an IPO.

A bond rated below investment grade (BB+ or lower) that offers higher interest rates to compensate for greater default risk.

An acquisition attempt that goes directly to a company's shareholders against the wishes of its board of directors.

A formal agreement to engage an investment bank for a specific transaction or advisory assignment.

The total market value of a company's outstanding shares, calculated as share price multiplied by shares outstanding.

A hybrid of debt and equity financing, subordinate to senior debt but senior to equity, often with equity conversion features.

A defensive strategy used by a target company to make a hostile takeover prohibitively expensive for the acquirer.

The sale of securities directly to a small number of qualified institutional investors without a public offering.

A formal legal document filed with the SEC providing details about an investment offering to the public.

The reorganization of a company's debt, operations, or structure to improve financial viability, often during financial distress.

A sale of new or closely held shares after a company's initial public offering, either by the company or existing shareholders.

The difference between the price paid by the underwriter for securities and the price at which they are sold to investors.

A group of investment banks that jointly underwrite and distribute a securities offering to share risk and broaden distribution.

A public offer to purchase shares from existing shareholders at a specified price, typically at a premium to the market price.