Icma Agreement among Underwriters

The ICMA Agreement Among Underwriters Explained

The International Capital Market Association (ICMA) is a non-profit organisation that represents the interests of capital market participants from around the world. Among its various initiatives, the ICMA has developed a set of standardised agreements that help to facilitate transactions in the capital markets.

One of the more significant of these agreements is known as the ICMA Agreement Among Underwriters. This agreement is used in the context of a bond issuance, where a group of underwriters agrees to purchase the entire issue of bonds from the issuer and then sell them on to investors.

So, what exactly does the ICMA Agreement Among Underwriters entail? Let’s break it down.

The Purpose of the Agreement

The ICMA Agreement Among Underwriters is designed to provide a standardised framework for the issuance and distribution of bonds. It helps to ensure that all parties involved are clear on their respective roles and responsibilities, and that the transaction proceeds smoothly and efficiently.

Key Provisions

The ICMA Agreement Among Underwriters contains a number of key provisions, including:

• The underwriters agree to purchase the entire issue of bonds from the issuer and then sell them on to investors.

• The issuer agrees to pay a fee to the underwriters for their services.

• The underwriters agree to use their best efforts to distribute the bonds to investors.

• The underwriters agree to indemnify the issuer against any losses or damages that may arise as a result of any misrepresentations or inaccuracies in the prospectus or other offering materials.

• The underwriters agree to comply with all relevant laws and regulations, and to take all necessary steps to ensure that the bonds are issued in accordance with those laws and regulations.

• The underwriters agree to maintain the confidentiality of any information that they receive from the issuer in connection with the transaction.

Benefits of the ICMA Agreement Among Underwriters

The ICMA Agreement Among Underwriters offers a number of benefits for all parties involved in a bond issuance. These include:

• Standardisation: The agreement provides a standardised framework that helps to ensure that everyone involved is clear on what is expected of them.

• Protection: The underwriters’ indemnification of the issuer helps to provide protection against potential losses due to misrepresentations or other inaccuracies in the offering materials.

• Efficiency: By providing a clear and standardised framework, the agreement helps to make the issuance and distribution of bonds a more efficient and streamlined process.

Conclusion

The ICMA Agreement Among Underwriters is a key tool for facilitating the issuance and distribution of bonds. By providing a standardised framework, it helps to ensure that all parties involved are clear on their respective roles and responsibilities, and that the transaction proceeds smoothly and efficiently. Its provisions help to protect the interests of both the issuer and the underwriters, and make the process of issuing and distributing bonds a more efficient and streamlined one.