Business, Legal & Accounting Glossary
Gross spread refers to the fees that an underwriter receives in exchange for helping an issuer raise debt or equity capital. Typically, the gross spread for an IPO is 7%, while the gross spread on a debt offering may range from under 1% to 5%+.
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 one or more underwriters hired for the offering.
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This glossary post was last updated: 22nd March, 2020