Friday, April 25, 2014

underwriting outline


  • new corporate issue MUST register with SEC
  • sold 1)underwriting 2)private placement
  • with underwriting corporate officers can sell some of their shares-underwriting is both primary and secondary underwriting
  • primary part, new shares from company
  • secondary underwriting, stock from selling stock holders
  • bonds, preferred stock, common stock
  • lead underwriter, sells securities
  • selling syndicate, help sell securities
  • corporations negotiate with underwriter to reduce cost of selling issues
issuer
  • provide information for prospectus
  • supply issue certificates

underwriters

  • a)register issue
  •  b)sell issue
  •  c)inform public about issue
  • d) form selling syndicate, at time of negotiation with issuer underwriters 
  • e)write prospectus-satisfy SEC disclosure requirement, provide info for selling broker/dealers to give to clients
  • blueskying, register issue with states where it will be sold 
Important underwriter decisions:
  • a)register issue with SEC
    b)make sure issue satisfies state requirements
  • b)determine broker dealers to include in syndicate
The syndicate manager is responsible for
  • blueskying the issue
  • sending the registration statement to the SEC
  • putting the prospectus together
  • determining  allocations for syndicate members
  • stabilizing issue
  • allocating securities for syndicate
  • issuer gives firm necessary info and syndicate manager finishes registration 
  • managers direct underwriting process
  • stabilizing issue happens at initial offering, maintaining public offering price
effective date
  • date the issue is released to be sold 

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