Module III· ECM — Follow-on, ABB, Rights IssueIntermediate
Question
What is a block trade, and how does it differ from an ABB?
Answer
A block trade is the sale of a large existing shareholding, often by one shareholder, typically overnight. The bank may buy the block as principal and resell it, taking market risk. ABB is broader bookbuilding for a placement and can be primary or secondary. Block trades are usually seller-liquidity events.