What is an Underwriting Spread?

The underwriting spread is the difference between the amount paid to the issuer of the securities and the amount sold at the last listing. The amount of the spread varies, and it depends on a number of factors, such as the size of the securities issue, the issuer's financial resources, the type of securities, the priority of the securities, and the type of underwriting of the underwriting bank. The spread on bonds sold by utility companies at auction may be 3%, while the spread on bonds issued by a small business may be 30%. ^[1]