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.

Notes:

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.

See also: Flotation Cost, IPO, Primary Market, Public Offering Price, Takedown, Underwriting

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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.

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underwriting spread

See gross spread.