According to reports, Chip designer Arm signs up 28 banks for its blockbuster initial public offering without giving them a fee arrangement, a reflection of owner SoftBank Group's leverage over underwriters clamoring for a role.

While it is common for the fees that banks receive in an IPOto be finalized at its completion, it is unusual for a company not to communicate to underwriters an approximate percentage of the offering they will receive as their cut, according to the reports.

SoftBank plans to hold off giving details on the fee structure until one to four days prior the pricing of Arm's IPO, expected in September, the sources added. By then, the IPO's investor road show will have launched and SoftBank will have a better sense of how good a job the banks are doing, before laying out their fee arrangement, according to reports.

The banks' expectation on Arm is that they will be paid 1.5 to 2.5 percent of the $6 billion to $7 billion offering as fees, plus a smaller amount of incentive fees, in line with prevailing rates in the market.

This kind of fee arrangement is not unprecedented for SoftBank, which has previously held back on fee details in high-profile capital market transactions that attract interest from underwriters. It also left the fee arrangement vague on its $21 billion stock sales at U.S. wireless carrier T-Mobile in 2020, until the very end, according to reports.

The banks on Arm's IPO view their assignment as part of a wider investment banking relationship that pays on many fronts. Many of them also arranged an $8.5 billion margin loan for SoftBank secured against a 75 percent stake in Arm. The money that the banks stand to make on that loan could not immediately be learned.