Issuing Corporate Securities - Awarding The Issue

There are two ways in which the corporation may select an underwriter. A corporation may elect to have multiple underwriters submit bids and choose the underwriter with the best bid. This is known as a competitive bid underwriting. A company may elect to select one firm to sell the issue and negotiate the terms of the offering with them. This is known as a negotiated underwriting. Most corporate offerings are awarded on a negotiated basis, while municipal bonds offering are usually awarded through competitive bidding.



The Underwriting Syndicate


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RELATED TERMS
  1. Competitive Bid

    A step in the initial public offering process whereby an underwriter ...
  2. Negotiated Sale

    A method of offering municipal bonds or similar financial instruments ...
  3. Underwriting Spread

    The spread between the amount underwriters pay an issuing company ...
  4. Negotiated Underwriting

    A process in which both the purchase price and the offering price ...
  5. Underwriting Fees

    Underwriting fees are monies collected by underwriters for performing ...
  6. Underwriting Risk

    The risk of loss borne by an underwriter. Underwriting risk generally ...
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