The level of representative underwriting and the underwriting costs of REIT SEOs

Purpose – The purpose of this paper is to investigate factors influencing the underwriting discount for US Real Estate Investment Trust (REIT) Seasoned Equity Offerings (SEOs).

Design/methodology/approach – The study provides new evidence on determinants of underwriting discounts with a comprehensive dataset of 783 US REIT SEOs from 1996 until June 2010. Ordinary least squares regressions are performed to estimate the effect of the level of representative underwriting along with other potential factors on underwriting discounts.

Findings – The study complements the well-documented notion of the economies of scale in SEO underwriting discounts. The equally (value) weighted underwriting discounts averaged 4.21 per cent (4.10 per cent) with a declining trend over time. The findings of this study show the statistically and economically significant negative effect of the level of representative underwriting on the underwriting discounts, as well as the significance of the structure of underwriting syndicate in determining the underwriting discounts. The findings suggest that issuers can minimize the costs of raising secondary equity capital by optimally allocating the underwriting business among the underwriters.

Originality/value – This paper adds to the international REIT SEO literature by exploring new evidence behind underwriting discounts. The study includes data before and after the REIT Modernization Act 1999 and during the recent global financial crisis period.

Costs of raising equity capital for U.S. REITs

The direct and indirect costs of raising equity capital by U.S. REITs through IPOs average 8.43% and 3.07%, respectively while these costs through SEOs average 4.63% and 1.18%, respectively. Ownership limit and the number of adverse risk factors identified in the IPO prospectus and underwriting syndicate structure determine such costs.

Certificate for Sixty Shares of Capital Stock in High Pressure Oil and Gas Syndicate, Limited

Certificate for 60 shares of capital stock in High Pressure Oil and Gas Syndicate, Limited to Hamilton K. Woodruff, Nov. 1, 1922.

The pricing and underwriting costs of Japanese REIT IPOs

This study investigates 40 Japanese REIT IPOs during 2001 to 2006 and finds evidence that higher final offer prices are reflected in higher underpricing levels by such IPOs. There is also some evidence that the engagement of one of the big three Japanese underwriting firms suggests less money is left on the table. Economies of scale in underwriting fees for Japanese REIT IPOs are also found. Specifically, the percentage underwriting fees decrease with higher amounts of equity capital sought but the percentage fee decreases at a diminishing rate.

Pré-ipo capital infusion and underwriting in Brazil: a study on conflicts of interests in the universal banking system

Mercados financeiros e finanças corporativas

The River syndicate and other stories,

Mode of access: Internet.

What constitutes a reasonable underwriting profit and the method of determining same.

Supplemental report also issued, which was filed at the Commissioner's meeting of December 7th, 1921. Titled: Report of the Fire Insurance Committee of the National Convention of Insurance Commissioners, approved and adoped December 7, 1921.

Regulatory approaches to genetic testing in insurance

Rapid advancements in the field of genetic science have engendered considerable debate, speculation, misinformation and legislative action worldwide. While programs such as the Human Genome Project bring the prospect of seemingly miraculous medical advancements within imminent reach, they also create the potential for significant invasions of traditional areas of privacy and human dignity through laying the potential foundation for new forms of discrimination in insurance, employment and immigration regulation. The insurance industry, which has of course, traditionally been premised on discrimination as part of its underwriting process, is proving to be the frontline of this regulatory battle with extensive legislation, guidelines and debate marking its progress.

Is there timing ability in currency markets? Evidence from ADR issuances

Is there timing ability in the exchange rate markets? We address this question by examining foreign firms' decisions to issue American Depositary Receipts (ADRs). Specifically, we test whether foreign firms consider currency market conditions in their ADR issuance decisions and, in doing so, display some ability to time their local exchange rate market. We study ADR issuances in the U.S. stock market between 1976 and 2003. We find that foreign firms tend to issue ADRs after their local currency has been abnormally strong against the U.S. dollar and before their local currency becomes abnormally weak. This evidence is statistically significant even after controlling for local and U.S. past and future stock market performance and predicable exchange rate movements. Currency market timing is especially significant i) for value companies, relatively small (yet absolutely large) companies issuing relatively large amounts of ADRs, companies with higher currency exposure, manufacturing companies, and emerging market companies, ii) during currency crises (when mispricings are rife) and after the integration of the issuer's local financial market with the world capital markets, iii) when the ADR issue raises capital for the issuing firm (Level III ADR), and iv) regardless of the identity of the underwriting investment bank. Currency market timing is also economically significant since it translates into total savings for the issuing firms of about $646 million (or 1.86% of the total capital-raising ADR issue volume). In contrast, we find no evidence of currency timing ability in a control sample made of non-capital raising ADRs (Level II ADRs). These findings suggest that some companies may have, at least occasionally, private information about foreign exchange.

Client intentions and Bruno Taut’s Glashaus

An often overlooked aspect concerning the Glashaus is the significant influence exerted by the client in the design of the building. In an intentional endeavour to create an exhibition pavilion that best showcased their glazed products and construction technologies, the German Luxfer Prism Syndicate both commissioned and majority financed the Glashaus. It would therefore seem strange that the official histories of the Glashaus would rather record the utopian, romanticised and arguably imagined intentions of Bruno Taut as the architect, as opposed to the reality of the client’s intentions. This paper offers a reinterpretation of the Glashaus from the perspective of German Luxfer Prism Syndicate. This reinterpretation is achieved through an investigation that primarily concentrates on the glazed areas of the Glashaus where the German Luxfer Prism Syndicates products were most evident. Using the arguments initially presented by Dietrich Neumann as a foundation, this research is additionally interwoven with inquiry into diverse aspects such as patents filed by the Luxfer group of companies and a close examination of the original black and white photographs of the Glashaus. A dramatically different understanding emerges when the Glashaus is argued from the perspective of the client; an understanding that is cold, hard and commercial as opposed to utopian and romanticised. As a result, this research makes a contribution to the current debate concerning the Glashaus and the re-evaluation of the histories of the modern movement.

SOTrain: A new program for training supervisors and operators in Australian sugar factories

The provision of effective training of supervisors and operators is essential if sugar factories are to operate profitably and in an environmentally sustainable and safe manner. The benefits of having supervisor and operator staff with a high level of operational skills are reduced stoppages, increased recovery, improved sugar quality, reduced damage to equipment, and reduced OH&S and environmental impacts. Training of new operators and supervisors in factories has traditionally relied on on-the-job training of the new or inexperienced staff by experienced supervisors and operators, supplemented by courses conducted by contractors such as Sugar Research Institute (SRI). However there is clearly a need for staff to be able to undertake training at any time, drawing on the content of online courses as required. An improved methodology for the training of factory supervisors and operators has been developed by QUT on behalf of a syndicate of mills. The new methodology provides ‘at factory’ learning via self-paced modules. Importantly, the training resources for each module are designed to support the training programs within sugar factories, thereby establishing a benchmark for training across the sugar industry. The modules include notes, training guides and session plans, guidelines for walkthrough tours of the stations, learning activities, resources such as videos, animations, job aids and competency assessments. The materials are available on the web for registered users in Australian Mills and many activities are best undertaken online. Apart from a few interactive online resources, the materials for each module can also be downloaded. The acronym SOTrain (Supervisor and Operator Training) has been applied to the new training program.