Underwriting Spread


Underwriting Spread
The spread between the amount underwriters pay an issuing company for its securities and the amount the underwriters receive from selling the securities in the public offering.

The size of the underwriting spread depends on the negotiations and competitive bidding amongst underwriters and the company itself. The spread increases as the risks involved with the issuance increase.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Underwriting spread — The underwriting spread is the difference between the amount paid by the underwriting group in a new issue of securities and the price at which securities are offered for sale to the public. It is the underwriter s gross profit margin, usually… …   Wikipedia

  • underwriting spread — The income that is generated by the underwriting syndicate and the selling group, which is essentially the difference between the amount paid to the issuer of securities in a primary distribution and the public offering price. Bloomberg Financial …   Financial and business terms

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  • Underwriting — refers to the process that a large financial service provider (bank, insurer, investment house) uses to assess the eligibility of a customer to receive their products (equity capital, insurance, mortgage or credit). The name derives from the… …   Wikipedia

  • spread — The price difference between two related markets or commodities. Chicago Board of Trade glossary l) Positions held in two different futures contracts, taken to profit from the change in the difference between the two contracts prices; e.g., long… …   Financial and business terms

  • Spread — (1) The gap between bid and ask prices of a stock or other security. (2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. Also known as a straddle. (3) Difference …   Financial and business terms

  • Underwriting Group — A temporary association of investment bankers who wish to purchase a new issue of securities from an issuer in order to distribute the issue to investors at a profit. The underwriting group shares the risk and aid in the successful distribution… …   Investment dictionary

  • Underwriting fee — The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their underwriting risk. The New York Times Financial Glossary …   Financial and business terms

  • underwriting fee — The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services. Bloomberg Financial Dictionary …   Financial and business terms

  • Effective spread — The gross underwriting spread adjusted for the impact of the announcement of the common stock offering on the firm s share price. The New York Times Financial Glossary …   Financial and business terms


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