Subscription market mechanism by which an oversubscribed placement has every line cut pro rata, so that the signed total returns to one hundred percent of the risk.
A broker placing a risk in the subscription market does not necessarily stop at one hundred percent: it often gathers more, because oversubscription signals that it bought well and because it provides room if a subscriber withdraws. The contract then carries a signing down clause: every written line is cut pro rata so that the sum of signed lines is exactly one hundred percent. A subscriber that wrote ten percent of a risk placed at one hundred twenty-five percent ends up signed at eight. Three practical consequences follow. A written line is not a definitive commitment, which forces any portfolio monitoring to separate written from signed capacity. A subscriber wanting a firm share must negotiate a guaranteed line, exempt from signing down, a concession often granted to the leader. And oversubscription is a market indicator in itself: a placement signed at exactly one hundred percent, or placed at ninety-five, says the precise opposite of one cut in half.
Placement of a 50M EUR property program in 2026. The broker gathers written lines totaling 138%. A subscriber having written 12%, that is 6M EUR, is signed at 8.7%, that is 4.35M EUR: it reserved and tied up 6M EUR of capacity to commit only 4.35M in the end, and its annual underwriting plan has to account for that systematic gap.
signing down, oversubscription, réduction des lignes signées, clause de réduction, Signing down, Signing, Réduction des lignes, Écrêtement des parts