Understanding Accelerated Book-Building and Handling Contracts (ABHC) in Initial Public Offerings (IPOs)

ABHC stands for Accelerated Book-Building and Handling Contract. It is a contract between an underwriter and an issuer that outlines the terms and conditions of an initial public offering (IPO) or other securities offering. The purpose of the ABHC is to facilitate the efficient and orderly process of bookbuilding, which is the process by which the underwriter determines the demand for the securities being offered and sets the offering price.

The ABHC typically includes provisions related to the following:

1. Payment of underwriting commissions and fees
2. Allocation of securities to investors
3. Confidentiality of information provided by the issuer
4. Use of proceeds from the offering
5. Timing and format of the offering
6. Conditions to closing the offering
7. Indemnification and liability provisions
8. Governing law and jurisdiction
9. Dispute resolution mechanisms

The ABHC is a critical document in the IPO process, as it sets out the terms and conditions that govern the relationship between the underwriter and the issuer. It is typically negotiated and finalized before the IPO roadshow, and is subject to review and approval by the issuer's board of directors and legal counsel.