CSC Chapter 12: Financing and Listing Securities

red herring prospectus

Another name for a preliminary prospectus.

blue skyed

A slang term used to indicate that a new issue has been cleared by a securities commission and may be distributed.

greensheet

In-house information circular for a firm’s sales representatives with the salient features of a new issue, both pro and con; used to solicit interest in the general public.

guaranteed bond

Bonds issued by a crown corporation but guaranteed by the applicable government as to interest and principal payments.

escrowed shares

Outstanding shares of a company which, while entitled to vote and receive dividends, may not be bought or sold unless special approval is obtained.

underwriting

The purchase for resale of a security issue by one or more investment dealers or underwriters.

halt in trading

What action can an exchange take to allow significant news, such as a pending merger or substantial change in dividends, to be reported and widely disseminated fairly?

competitive tender

A distribution method, often used by the Bank of Canada, where bids are requested from primary distributors and the higher bids are awarded the securities for distribution.

bought deal

A new issue of stocks or bonds bought from the issuer by an investment dealer for resale to its clients, usually by way of a private placement or short form prospectus.

non-competitive tender

A method of distribution for marketable bonds with primary distributors being allowed to request bonds at the average price of the accepted competitive tenders.

short form prospectus

What type of prospectus contains information by reference to material filed by the corporation in the Annual Information Form?

initial public offering

A new issue of securities offered to the public for investment for the very first time.