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Investor or lender demand exceeding the amount offered or sought in a transaction.
Intermediaries record applications or orders and the issuer decides allocations according to the offer's rules. Some requests may be conditional or withdrawn before settlement, so reported demand needs its stage and basis. Oversubscription can affect pricing or allocations, but it does not directly measure the issuer's credit quality, later trading liquidity or future repayment performance.
Imagine a J$1 billion bond offer receiving valid applications for J$1.5 billion. Demand is 1.5 times the original amount, with J$500 million requested above it. If the issuer accepts only J$1 billion, it must reduce or reject part of the applications. It has not automatically borrowed J$1.5 billion, and applicants do not necessarily receive identical percentage allocations.