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LSDefine

Simple English definitions for legal terms

underwriting spread

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A quick definition of underwriting spread:

Underwriting spread: The difference between the price that a company gets for selling its stocks or bonds to an underwriter and the price that the public pays for those same stocks or bonds. The underwriting spread is made up of different fees that the underwriter charges for its services. This spread compensates the underwriter for taking on the risk of buying the securities from the company and selling them to the public.

A more thorough explanation:

An underwriting spread is the difference between the price that an underwriter pays to the issuer of a security and the price paid by the public in the initial offering. This spread compensates the underwriter for its services and is made up of the manager's fee, the underwriter's discount, and the selling-group concession or discount.

  • When a company wants to issue stocks or bonds, they may hire an investment bank to underwrite the offering. The investment bank will buy the securities from the company at a discounted price and then sell them to the public at a higher price. The difference between the discounted price and the public offering price is the underwriting spread.
  • For example, if a company wants to issue $100 million in bonds and the investment bank agrees to underwrite the offering at a discount of 2%, the investment bank will buy the bonds from the company for $98 million. The investment bank will then sell the bonds to the public for $100 million, making a profit of $2 million, which is the underwriting spread.

These examples illustrate how the underwriting spread works in investment banking. The underwriter takes on the risk of buying the securities from the issuer and then selling them to the public. The underwriting spread compensates the underwriter for this risk and for the services provided in bringing the securities to market.

underwriting agreement | undesirable discharge

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medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
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