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
New York Joins Flow of States Making Tampons Tax-Free3 days ago
The Week in Public Finance: Hot Munis, Cooling Off Creditors and Warming Up to Facebook3 days ago
Washington Superintendent Sues 7 School Districts and the State5 days ago
Pennsylvania Hikes Cigarette Tax But Stays Last-Standing State With Tax-Free Cigars5 days ago
Is Kurt Summers the Future of Chicago Politics?5 days ago
Chicago's 2016 Olympics Bid Leaves Pricey Legacy 7 Years Later6 days ago