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Gross Spread |
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Gross spread The fraction of the gross proceeds of an underwritten securities offering that is paid as compensation to the underwriters of the offering.
Gross Spread In a public offering, the difference between the price an underwriter pays an issuer and the price at which it sells the offering to the public. That is, an underwriter pays the issuer an agreed-upon price to purchase an issue, which it then attempts to place with investors. When it places the issue, it charges the investor a certain price like any other trade. The difference is known as the gross spread; it forms the bulk of an underwriting firm's profits. See also: Fully subscribed, Overbooked, Underbooked. Gross spread. In an initial public offering (IPO), the gross spread is the difference between what the underwriters pay the issuing company per share and the per share price that investors pay. It's usually about 7%. For example, if a stock is to be offered to the public at $10 a share, the underwriters may pay the issuing company around $9.30 per share. With millions of shares being sold, the 70 cents per share adds up to millions of dollars for the investment bank. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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The gross spread - the difference between the price given to the seller and the price at which the shares were sold - was $1. The indicative gross spread for natural gas processing activities on the Gulf Coast averaged $0. The latest term securitization agreement placed $80 million of automobile receivables-backed securities at a gross spread of over 13%, and the Company announced extension of its $100 million prime credit facility agreement through January 1, 2002. |
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