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The company had planned to float in Europe, where competition between big global underwriters and local banks means that underwriting fees for deals of a similar size are 1 percent to 2 percent.
There are no underwriting fees, for instance.
Morgan Stanley received approximately $68 million in underwriting fees for the IPO, according to data provider Thomson Reuters.
Consequently, underwriting fees for the Goldman Sachs Group, Merrill Lynch and other securities firms fell an estimated $900 million.
Firms made short-term underwriting fees for packaging mortgage-backed securities that have since become known as "toxic assets".
The effects of this are most visible in investment banking, where underwriting fees for share issues, for example, have risen sharply.
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SPAC performance is worse for acquisitions announced near the predetermined two-year deadline, for acquisitions with deferred initial public offering underwriting fees, and for acquisitions with market value close to the required 80% threshold.
The bank was ranked No. 1 for equity underwriting fees in the first quarter, according to Thomson Reuters data.
"Wall Street lives off these local issuers, and they make obscene spreads," he said, cutting someone off to lay out an idea for eliminating costly underwriting fees by consolidating bond issuance by cities and towns at the state level.
More important, the bankers and their bosses only get paid bonuses out of the underwriting fees generated on such deals, not (for good reason) from the net interest earnings on loans sitting on balance sheets, so there is an agency problem here.
Douglas Ferrans, author of a report on equity underwriting for the Institutional Investors Council, says the bundling of charges for corporate-broking services with underwriting fees raises the suspicion that shareholders are paying over the odds.
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CEO of Professional Science Editing for Scientists @ prosciediting.com