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

The difference in the price that an investor pays for a new security issue and the price paid the issuer by the lead underwriter. The gross spread is a function of a number of variables including the size of the issue and the riskiness, or price volatility, of the security. Also called underwriting spread.

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.

References in periodicals archive ?
This would heap pressure on margins of steel makers who lack captive iron ore supply especially long steel players impacting their gross spreads by 2-4%.
Separately, Aegean recorded stable operating results in the first quarter of 2018 as network volumes and gross spreads were largely consistent with the fourth quarter of 2017, reflecting competitive industry conditions and the continued decision to restrain volumes in ports and lines of business with lower margin profiles.
The financing book has also enhanced by 42.44 percent (Sept 2015: 32.79%) with financing to deposit ratio improved to 52.51 percent (Sept 2015: 39.40%), which slightly enhanced the gross spreads. The net spread after provisions has also improved to 64.88 percent (Sept 2015: 44.43%) chiefly because of reversals of provisions in financing and investments portfolio.
16, 2015 international FOB reference prices of $315/mt (Vietnam rice) and $344/mt (Thailand), the gross spreads secured by NFA (attributed to ocean freight, insurance, survey fees, etc.) translate to only $99/mt in late 2015 versus $228/mt in late 2008 and 2009, or some $129/mt in savings.
This increase was primarily driven by improvement in gross spreads as a result of low cost of borrowings and continued low operating expenses.
Underwriting spreads are gross spreads defined as the difference between the offered amount and the proceeds to the issuer, expressed as the percentage of the offered amount (or issue size; Gande, Puri, and Saunders, 1999).
We find these firms pay lower gross spreads and go to market faster than the same type of firm that chooses the traditional registration procedure.
The gross spreads were remarkably low: $1.77 per bond for the pension bonds and $2.25 per bond for the water deal, as shown in Exhibit 2.
NABARD has a modest earnings profile, marked by low gross spreads, driven largely by lending at mandated rates and increased reliance on borrowings at market rates.
We also examine the differences in offering yield spreads and gross spreads among shelf public, nonshelf public, and 144A issues.
This was primarily driven by a sharp increase in its gross spreads because of its reduced borrowing costs and better control on operating expenses.
We examine underpricing, long-run returns, lockup periods, and gross spreads for penny stock IPOs over the 1990-1998 period.