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
Planned Parenthood Wins Battle to Block Mississippi Law3 hours ago
The Week in Public Finance: School Funding's Lost Decade, Teacher Pension Pressures and More5 hours ago
In Need of Education Funding, States Look to Customers and Corporations11 hours ago
California Launches Criminal Investigation Into Wells Fargo1 day ago
Princeton Settles Nonprofit Tax Lawsuit2 days ago
Nevada Raises Taxes to Build an NFL Stadium for a Team That May Not Play There3 days ago