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
The City as Consultant1 day ago
How Bloomberg’s Still Changing the Way Cities Operate1 day ago
New York Budget Deal Includes Ethics Reforms44 minutes ago
Districts Try to Block Kansas' School Funding Law39 minutes ago
The Week in Public Finance: Taxes, Drought and a Nod to the Baha Men2 days ago
States Trying to Figure Out Whether Entertainment Tax Credits Really Work2 days ago