Tutorial: Initial Terms
The initial term sheet is available on the OpenBook® auctions 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 |
Acme Inc. |
|
Issue Size Range |
US$500-750 million (final size set
60 minutes before close) |
|
Maturity |
08/15/13 |
|
Coupon Rate |
To be determined by auction |
|
Settlement Date |
08/04/03 |
|
Issue Date |
08/04/03 |
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Settlement Terms |
Flat |
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Type of Issue |
Senior unsecured |
|
Coupon Dates |
August 15 / February 15, commencing
August 15 |
|
Structure |
Non-call life |
|
Format |
Book entry DTC |
|
Rating |
A1/A+ |
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Benchmark Treasury |
3.625% May 15, 2013 (CUSIP 912828BA7) |
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Max Benchmark Rate |
4.75% (auction may be cancelled if
benchmark yield exceeds this rate) |
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Min/Max Spread
|
115/125 basis points over benchmark
|
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Protected Spread
|
4 bps |
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Auction Date/Time |
08/01/03, 9:00AM-11:00AM EDT
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Pricing Time |
Approximately 30 minutes after close |
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Maximum Purchase Limit |
The lower of your purchase limit or $75.0
million |
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Minimum/Multiple |
Competitive: $1,000,000/$1,000
Non-Competitive: $1,000/$1,000 |
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Listed |
N/A |
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Soft Dollar Terms |
10% |
|
Manager |
WR Hambrecht + Co |
There are several features of OpenBook auction transactions that differ from traditional bond offerings.
| 1. |
Issue Size |
In an OpenBook auction , the issuer states a deal size range at the beginning of an
auction. The issuer will finalize the deal size during the 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 a 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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