Underwriters are municipal securities dealers: they help governments sell municipal bonds. To do this, they (or sometimes a single underwriter) will purchase the bonds from a municipality, then turn around and sell bonds on the municipal market.
Underwriters are paid by a fee from governments and will usually take a cut of the bond sale.
Underwriters and municipalities negotiate what the terms of the deal will be. Typically this will include the interest rate of the bond, the term (life of the bond) and the initial offering price. In a competitive sale (versus a negotiated one), underwriters bid on the chance to work with a municipality, which then chooses the best deal.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
LATEST FINANCE HEADLINES
Lacking Guaranteed Funding, Philadelphia Schools Beg for Donations through Social Media1 hour ago
No One Really Knows How Much Money Marijuana Will Bring to States17 hours ago
First D.C. Statehood Bill in 20 Years Gets a Senate Hearing18 hours ago
Pennsylvania Legislature Considers Cigarette Tax to Prop up Philadelphia Schools22 hours ago
States Get Federal Help to Fight Tax-Evading Businesses1 day ago
In a First, Washington Supreme Court Finds Legislature in Contempt2 days ago