Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Securities > 3a primary markets > Flashcards

3a primary markets Flashcards

You may prefer our related Brainscape-certified flashcards:
SIE Exam flashcards
1
Q

Sponsor listing agent?

A

Assess suitability for listing
Assess best method of bringing co. to market
Coordinates production of prospectus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Legal advisors?

A

Ensures relevant matters are in prospectus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Public relations?

A

To create positive perception of company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Accountants?

A

Validates financial statements in the prospectus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Corporate broker?

A

Interface between the company and the mkt
Advises the company on curent mkt conditions
Issuing house at IPO stage and ongoing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Underwriting meaning?

A

Where a bank guarantees the minimum level of proceeds on an issue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a lead manager?

A

Firm given responsibility to coordinate issuance of securities through a syndicate.
Generally the sponsor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Co-manager?

A

Appointed by the lead manager to assist in issuance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Issuing house?

A

Usually an investment bank
Corporate
Invited applications form the public at a slightly higher price than the issuing house had paid the issuing company through an offer document

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Bookrunner?

A

A firm who is given the role to coordinate the overall level of investor demand
typically the lead manager

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Co-lead manager?

A

Joint responsibility to coordinate issue of securities
Usually in a different geographical area

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Purpose of underwriting?

A

Means of guaranteeing a minimum level of proceeds from a share issuance
Used in all situations where share issues are generating proceeds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Is there a limit on number of underwriters?

A

no

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does non-dilutive follow-on offering mean and give an example?

A

Shares brought to the market from issued share capital but not part of the free float
E.g. directors selling own shares to investors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Stabilisation?

A

Where a lead manager in an issue purchases stock in the secondary market to support the issue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What does dilutive follow-on offering mean?

A

When company’s board agrees to increase share float for the purpose of sellling more equity in the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Open offer?

A

Offer open for exisiting shareholders to take up and buy the shares or not to buy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Offer for subscription

A

Company issues shares direct to the general public - not so common

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Offer for sale

A

Similar to offer for subscription except a bank “issuing house” buys up the shares before offering them to the public - more common

19
Q

Fixed price offer

A

Often at an offer price which is artificaly low to generate goodwill amongst purchases - encourage active secondary mkt

20
Q

Tender offer

A

Investors make bids and issuing house then selects applications with highest bids

21
Q

Placing meaning?

A

This is like an offer for sale apart from issuing house sells only to large institutional clients, typically on selective basis.
No need for prospectus here
For qualified invesotrs, not a public offer

22
Q

Intermediaries offer

A

A placing made through issuing houses (brokers)

23
Q

Introductions? When might this happen?

A

Company obtains listing without issuing new share capital
This is when company is aleady quoted on an overseas stock exchange and might seek to expand potential SH base on another exchange

24
Q

Prices in placings vs. offer for sale?

A

Placing is cheaper than offer for sale because of fact that it is for qualified invesotrs - selective marketing technique.
Issuers are exempt from obligation to produce a prospectus

25
Q

Conditions for listing - how many years of audited accounts?

A

3 years

26
Q

Conditions for listing - share ownership for main market companies?

A

10% to the public

27
Q

Listing rules - disclosure requirements

A

Price sensitive info
Dividends, director’s dealings, changes in registers
Financial info

28
Q

Two types of bond issuers specifically in the US?

A

Municipal bonds (e.g. states/local authorities)
Agency bonds (e.g. govt sponsored agencies)

29
Q

Why are municipal bonds attractive?

A

Because interest income is exempt from federal income tax and in many cases, state and local taxes

30
Q

What is attraction of agency bonds?

A

They are backed by government, considered safe investments

31
Q

Who issues UK govt gilts and what style?

A

DMO, competitive bid (auction) have to honour price

32
Q

UK govt gilts - what is min GEMMS are required to bid?

A

> 1mn nominal

33
Q

French and German bonds - how is this done?

A

govt auction, bid pricing system

34
Q

US govt bond issues - how is this done

A

Tender style - single price auction
Done by the dept of treasury - FED

35
Q

What are non-competitive bids, how does the process work?

A

WHen govts issue a smaller tranche of debt using a non-competitive process.
Non comp bids are allotted at the weighted avg. price of the accepted price bids.

36
Q

How can debt capital be raised to fund developments in a business (3 ways)

A

Schedules programmes to borrow money than issue bonds
Shelf registration
Company issues MTNs in response ot client requests

37
Q

What is shelf registration - how long does it last, where is it used?

A

Single registration covers mutliple issues
Up to 2 years
Typically in the US with medium-term notes (2-10 yrs to maturity)

38
Q

What is a reverse enquiry?

A

When investors request the bond and company responds - i.e. they issue MTNs in response to client requests

39
Q

Bond issue: pitching?

A

Investment bank interested in managing the issue makes a pitch to the issuer

40
Q

Bond issue: indicative bid

A

Indicaiton given by investment bank to issuer regarding how much the bond issue may raise

41
Q

Bond issue: mandate announcement

A

Announcement of banks given the mandate to manage the bond issue

42
Q

Bond issue: credit rating

A

IB will try to obtain favourable credit rating for the issue from rating agency.
Success of the issue and interest rate required by investors depend on this credit rating

43
Q

Bond issue: roadshow

A

Series of meetings with potential investors and brokers, conducted by ocmpany and its underwriter to market the issue

44
Q

Who can take part in comeptitive bids?

A

Large investors
Only GEMMS can enter bids with the DMO
Min NV of 1mn and multiples of 1mn
If successful, pay the bid

45
Q

Non-competitive bids - who can take part?

A

Give private investor opportunity to take part
No price bid
Bid in minimum of 1k lots, max of 500k
Pay the avg of successful competitive bids

46
Q

Difference between tender vs. auction?

A

Auction: successful bidder (each) pays the price they bid
Tender: the successful bidders pay the lowest successful price

Securities (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions