Negotiated Underwriting

AAA

DEFINITION of 'Negotiated Underwriting'

A process in which both the purchase price and the offering price for a new issue are negotiated between the issuer and a single underwriter.

INVESTOPEDIA EXPLAINS 'Negotiated Underwriting'

The underwriter pays the issuer a purchase price, and the public pays the offering price. The spread between the purchase price and the public offering price represents the proceeds to the underwriter.

RELATED TERMS
  1. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  2. Issuer

    A legal entity that develops, registers and sells securities ...
  3. Underwriting

    1. The process by which investment bankers raise investment capital ...
  4. New Issue

    A reference to a security that has been registered, issued and ...
  5. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  6. Competitive Bid

    A step in the initial public offering process whereby an underwriter ...
Related Articles
  1. Brokerage Functions: Underwriting And ...
    Brokers

    Brokerage Functions: Underwriting And ...

  2. A Look At Primary And Secondary Markets
    Investing Basics

    A Look At Primary And Secondary Markets

  3. 5 Tips For Investing In IPOs
    Investing

    5 Tips For Investing In IPOs

  4. Master The Art Of Negotiation
    Personal Finance

    Master The Art Of Negotiation

Hot Definitions
  1. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  2. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  3. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  4. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  5. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena ...
Trading Center