New offerings of securities (bond or equities) are oversubscribed when orders exceed available supply. To cover oversubscription levels, some issuers can and do increase the number of shares or bonds on offer. Failing that, issuers will sell the securities at the equilibrium price recommended by underwriters and will give some orders zero allocations. In bond offerings, issuers will tighten pricing through marketing to massage down oversubscription. As the return on the bond shrinks, orders will go out of the book of demand until underwriters reach a price they believe enables the bonds to trade well in the aftermarket.


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