Chapter 4 - Primary Markets (14%) Flashcards
What is a Greenshoe?
The option to increase the base number of shares offered in an IPO
What is the first stage of an IPO
The Decision
1st stage of IPO - The Decision - What happens?
Pros/Cons are weighed up of executing an IPO
What is the second stage of an IPO
Preparation of the Prospectus
2nd stage of IPO - Preparation of the Prospectus - What happens?
Official document that outlines the terms of the IPO.
What is the third and final stage of an IPO
The sale of securities
3rd stage of IPO - Sale of Securities - What happens?
What it bladdddddy sais on the tin mate
What is the role for a ‘Sponsor’ in the listing of an IPO
Assessing the company’s suitability for listing.
What is the role for a ‘Nomad’ in the listing of an IPO
An exchange expert, advising the company on all aspects of AIM listing rules and compliance
What is the role for a ‘Corporate Broker’ in the listing of an IPO
Act as an interface between the company and the stock market
What is ‘Book-Building’
The syndicate will gather willing investors to purchase the shares during an IPO
What is ‘Stabilisation’
The lead manager to agrees to purchase stock from an IPO if they fall below a predefined price. To stabilize the price level
What is a ‘Circuit Breaker’
Temporarily suspend trading in periods of volatility
Admission for listing - First stage
Filing of a prospectus
Admission for listing - Second stage
An application to see if their is enough public interest in the stock once listed
What is the expected market capitalisation of a company for their shares to become listed
£30 Million
What % of the company shares should be in public hands during an IPO
10%
For issuers listing debt securities, what does the market value have to be at least?
£200,000
What are supernational bonds
Inter-national banks raising money through bonds
What did ‘Shelf Generation’ allow?
Multiple bonds to be registered in a single registry
What is a Medium Term Note (MTN)
A Bond with 2-10 years maturity
Issuing bonds - What is ‘Indicative Bid’
An estimate of the total bid from potential investors
Issuing bonds - What is ‘Mandate Announcement’
The issuer will announce the banks given permission to arrange the issue of the bond
Issuing bonds - What is ‘Credit Rating’
A credit rating is given to the bond
