# When is an underwritten share issue not underwritten?



## markrmau (19 October 2006)

Look at the conditions on NMS underwriting agreement with pattersons.

If SP falls below 20c pattersons can run away.  

I have never seen something like this before. Has anyone else?


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## Knobby22 (20 October 2006)

markrmau said:
			
		

> Look at the conditions on NMS underwriting agreement with pattersons.
> 
> If SP falls below 20c pattersons can run away.
> 
> I have never seen something like this before. Has anyone else?




No! Whats the point of paying big fees to the underwriter then? 

The main purposes of having underwriters is:
 to ensure the raising takes place and;
 to give confidence to the investors that the underwriter has studied the company and knows its value so investors can buy with some confidence.

This fails on both counts.


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