underwriting outline

underwriting spread,

• $ paid for underwriting

• negotiated underwriting
• built into price, competitive underwriting

spread for corporate issue,

• difference between public offering price and issuer proceeds

spread for a municipality

• difference between reoffering yields and syndicate bid to issuer 

spread factors

• size of issue
• size of corporation
• size of industry
• size of minicipality
• reduced by underwriter's advertising and registering/blueskying costs
• divided among syndicate members and broker/dealer that assists in selling issue

sales charge

• lead underwriter gets part
• known as manager's fee
• part of total spread
• manager gets fee on every share of bond sold-did preparation work
• concession, syndicate member decides selling group will sell bonds for them, syndicate member gives part of spread to selling group member
• syndicate members get rest of spread

corporate spread

• manager's fee, compensation for work on underwriting. 
• receive manager's fee even if they don't sell shares
• underwriting fee. sales charfe beyond manager's fee
• underwriting fee, biggest part of sales charge
• get underwriting fee not used in concession, if syndicate members allow selling group broker/dealers to sell shares
• no name, remainder of underwriting fee not used in concession
• syndicate member a)get underwriting fee b)give concession to selling group member

 In a corporate issue, a syndicate member receives which of the following upon sale as part of the underwriting?

• underwriting fee
• underwriting fee for syndicate sales
• managing fee, manager gets
• concession, for selling group sales

Municipal spread

• manager's fee, for syndicate manager, gets even if he doesn't sell the bonds
• total takedown, for syndicate members and syndicate manager
• selling group, gets concession for sales
• total takedown, concession and additional takedown 
• manager buys municipal issue at a discount
• total takedown, manager awards bonds to syndicate members excluding discount 
• total takedown= concession + additional takedown

In a municipal issue, a syndicate member receives which of the following upon sale of part of underwriting?

• takedown
• syndicate gets takedown
• selling group member receives additional takedown
• spread, total