Underwriting Fees and Power Derivatives

1998 ◽  
Author(s):  
Emilio Barone ◽  
Antonio Castagna
Keyword(s):  
Power Derivatives ◽  
Underwriting Fees

The direct costs of raising external equity capital for US REIT IPOs

2012 ◽  
Vol 30 (6) ◽  
pp. 538-562
Author(s):  
Ranajit Kumar Bairagi ◽  
William Dimovski
Keyword(s):  
Initial Public Offerings ◽  
Economies Of Scale ◽  
Weighted Average ◽  
Direct Costs ◽  
Equity Capital ◽  
Return Volatility ◽  
Critical Determinant ◽  
Content Type ◽  
Underwriting Fees ◽  
External Equity

PurposeThe purpose of this paper is to investigate the total direct costs of raising external equity capital for US real estate investment trust (REIT) initial public offerings (IPOs).Design/methodology/approachThe study provides recent evidence on total direct costs for a comprehensive dataset of 125 US REIT IPOs from 1996 until June 2010. A multivariate OLS regression is performed to determine significant factors influencing the level of total direct costs and also underwriting fees and non‐underwriting direct expenses.FindingsThe study finds economies of scale in total direct costs, underwriting fees and non‐underwriting expenses. The equally (value) weighted average total direct costs are 8.33 percent (7.52 percent), consisting of 6.49 percent (6.30 percent) underwriting fees and 1.87 percent (1.22 percent) non‐underwriting direct expenses. The study finds a declining trend of total direct costs for post 2000 IPOs which is attributed to the declining trend in both underwriting fees and non‐underwriting direct expenses. Offer size is a critical determinant for both total direct costs and their individual components and inversely affects these costs. The total direct costs are found significantly higher for equity REITs than for mortgage REITs and are also significantly higher for offers listed in New York Stock Exchange (NYSE). Underwriting fees appear to be negatively influenced by the offer price, the number of representative underwriters involved in the issue, industry return volatility and the number of potential specific risk factors but positively influenced by prior quarter industry dividend yield and ownership limit identified in the prospectus. After controlling for time trend, the paper finds REIT IPOs incur higher non‐underwriting direct expenses in response to higher industry return volatility prior to the offer.Originality/valueThis paper adds to the international REIT IPO literature by exploring a number of new influencing factors behind total direct costs, underwriting fees and non‐underwriting direct expenses. The study includes data during the recent GFC period.

An Investigation of Underwriting Fees for Asset-Backed Securities

2012 ◽  
Vol 57 (2) ◽  
pp. 216-237
Author(s):  
David Puskar ◽  
Aron A. Gottesman
Keyword(s):  
Underwriting Fees ◽  
Asset Backed Securities

Financial Innovation and Financial Intermediation: Evidence from Credit Default Swaps

2020 ◽  
Author(s):  
Alexander W. Butler ◽  
Xiang Gao ◽  
Cihan Uzmanoglu
Keyword(s):  
Risk Sharing ◽  
Financial Intermediation ◽  
Financial Innovation ◽  
Credit Default Swaps ◽  
Regulatory Requirements ◽  
Credit Default ◽  
Underwriting Fees

We study the influence of credit default swaps (CDS) trading on the costs of bond intermediation. After CDS initiation, CDS firms pay 12% to 28% (8 to 20 basis points) lower underwriting fees than similar non-CDS firms do. Underwriting fees decline more for riskier issuers and illiquid bonds for which the ability to hedge with CDS is more valuable. In bond offerings, participation by investors facing risk-based regulatory requirements increases after CDS initiation. Our evidence suggests that CDS-driven innovations in risk sharing contribute to the transactional efficiency of the market by reducing the financial intermediation costs of placing bonds. This paper was accepted by Karl Diether, finance.

scholarly journals Option Derivatives in Electricity Hedging

10.14311/1239 ◽  
2010 ◽  
Vol 50 (4) ◽  
Author(s):  
P. Pavlátka
Keyword(s):  
Fair Value ◽  
End User ◽  
Electricity Prices ◽  
Electricity Trading ◽  
Black Scholes ◽  
Power Derivatives ◽  
High Volatility ◽  
Electricity Power ◽  
The Moment ◽  
The Right

Despite the high volatility of electricity prices, there is still little demand for electricity power options, and the liquidity on the power exchanges of these power derivatives is quite low. One of the reasons is the uncertainty about how to evaluate these electricity options and about finding the right fair value of this product. Hedging of electricity is associated mainly with products such as futures and forwards. However, due to new trends in electricity trading and hedging, it is also useful to think more about options and the principles for working with them in hedging various portfolio positions and counterparties. We can quite often encounter a situation when we need to have a perfect hedge for our customer’s (end user consuming electricity) portfolio, or we have to evaluate the volumetric risk (inability of a customer to predict consumption, which is very similar to selling options. Now comes the moment to compare the effects of using options or futures to hedge these open positions. From a practical viewpoint, the Black-Scholes prices appear to be the best available and the simplest method for evaluating option premiums, but there are some limitations that we have to consider.

Pricing analysis of wind power derivatives for renewable energy risk management

2021 ◽  
Vol 304 ◽  
pp. 117827
Author(s):  
Takashi Kanamura ◽  
Lasse Homann ◽  
Marcel Prokopczuk
Keyword(s):  
Risk Management ◽  
Renewable Energy ◽  
Wind Power ◽  
Power Derivatives ◽  
Energy Risk Management
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