What does the reoffering scale represent in the underwriting process?

The reoffering scale is an important tool in the underwriting process, as it outlines the prices and/or yields at which new issue securities will be offered to investors following their initial sale by an underwriter. This scale provides a clear framework for how the securities will be priced in the market, reflecting factors such as demand, market conditions, and the perceived risk associated with the securities.

Establishing a reoffering scale allows underwriters to effectively manage the distribution of new securities by setting competitive prices that will attract investor interest while ensuring that the issuer raises the desired amount of capital. The scale is crucial for both the issuers and investors, as it helps facilitate a successful sale of the securities in the primary market.

While other aspects of the capital-raising process involve anticipated returns on investment, commissions charged, and regulatory fees, these elements do not directly correlate with the purpose and function of the reoffering scale in the context of underwriting. The reoffering scale specifically focuses on the pricing and yields necessary for the initial public listing and subsequent investor purchases within the underwriting process.