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The investment banking firm that puts together the syndicate of firms sponsoring a public offering of securities is referred to as the lead underwriter or lead manager. A lead underwriter is always chosen for stock offerings. Bond issues also sometimes rely on the services of a lead underwriter. The responsibilities of the lead underwriter include setting the offering price and allocating shares of the offering among the syndicate members. The prestige and reputation of the lead underwriter can profoundly impact the success of the offering so most companies take great care in selecting their lead underwriter. The lead underwriter of a very large or highly publicized public offering is generally a prominent national firm with in-house research capabilities and an extensive brokerage network. Companies with smaller offerings may be required to settle for a well-known regional firm as their lead underwriter. |
