View source for Finance:Gross spread

'''Gross spread''' refers to the fees that underwriters receive for arranging and underwriting an offering of [[Finance:Debt|debt]] or [[Finance:Stock|equity]] [[Finance:Security|securities]]. The gross spread for an [[Finance:Initial public offering|initial public offering]] (IPO) can be higher than 10% while the gross spread on a debt offering can be as low as 0.05%.
For example, if a company sells $100 million of shares in an IPO and the gross spread is 7%, the underwriting syndicate will receive fees of $7 million. These fees will be divided among the underwriters arranging the offering.

==External links==
*[https://ssrn.com/abstract=498482 Underpricing versus Gross Spread: New Evidences on the Effect of Sold Shares at the Time of IPOs]
*[https://web.archive.org/web/20070928080250/http://www.fma.org/SLC/Papers/ADRspreads.pdf How do investment banks price underwriting services for American Depository Receipts?]
*[http://www.ecb.int/pub/pdf/scpwps/ecbwp550.pdf Underwriter competition and gross spreads in the eurobond market]


[[Category:Securities (finance)]]
[[Category:Stock market]]
[[Category:Underwriting]]



{{Sourceattribution|Gross spread}}