Tutorial: Initial Terms
The initial term sheet is available on the OpenBook Homepage at the time an auction is announced and can also be reached by clicking on the “Terms” link at the top of all OpenBook auction screens.
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Initial Terms
Acme Inc. US $500-750 million, 10 years
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Issuer
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Acme Inc.
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Issue Size Range 
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US$500-750 million (final size set
60 minutes before close)
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Maturity
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08/15/13
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Coupon Rate
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To be determined by auction
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Settlement Date
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08/04/03
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Issue Date
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08/04/03
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Settlement Terms
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Flat
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Type of Issue
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Senior unsecured
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Coupon Dates
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August 15 / February 15, commencing
August 15
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Structure
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Non-call life
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Format
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Book entry DTC
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Rating
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A1/A+
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Benchmark Treasury
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3.625% May 15, 2013 (CUSIP 912828BA7)
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Max Benchmark Rate 
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4.75% (auction may be cancelled if
benchmark yield exceeds this rate)
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Min/Max Spread 
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115/125 basis points over benchmark
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Protected Spread 
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4 bps
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Auction Date/Time
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08/01/03, 9:00AM-11:00AM EDT
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Pricing Time
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Approximately 30 minutes after close
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Maximum Purchase Limit
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The lower of your purchase limit or $75.0
million
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Minimum/Multiple
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Competitive: $1,000,000/$1,000
Non-Competitive: $1,000/$1,000
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Listed
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N/A
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Soft Dollar Terms
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10%
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Manager
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WR Hambrecht + Co
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There are several features of OpenBook auction transactions that differ from traditional bond offerings.
| 1. |
Issue Size |
In OpenBook, the issuer states a deal size range at the beginning of an
auction. The issuer will finalize the deal size during an auction.
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| 2. |
Max Benchmark Rate |
If the benchmark Treasury yield moves above this level, the issuer has
the right but not the obligation to cancel the auction.
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| 3. |
Min/Max Spread |
The largest and smallest bid spread in basis points over the benchmark Treasury allowed during an auction.
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| 4. |
Protected Spread Range |
The maximum number of basis points by which an investor’s private bid can improve upon his public bid without losing the time stamp of that bid. Improving upon an public bid by more than the protected spread range will result in cancellation of the original bid and the entry of a new bid with a new time stamp.
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Next > Bidding
