Negotiated Sale


DEFINITION of 'Negotiated Sale'

A method of offering municipal bonds or similar financial instruments in which the issuing entity and a selected underwriter negotiate the terms of the issue, as opposed to having multiple underwriting groups competitively bidding on the issue to establish its terms.

BREAKING DOWN 'Negotiated Sale'

In a negotiated sale, the underwriter, selected by the issuing entity before the sale date, will perform the financing for the issue. Lower quality issues generally reap the greatest benefit from this type of underwriting technique as the underwriter works with the company to sell the issue to the market. When the underwriter and the issuer work together to clearly explain the issue, they will often receive a better rate in the market for the issuer. Negotiated sales allow for greater flexibility to when the issue is released so that it can be better timed in the market to get the best rate.

  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. New Issue

    A reference to a security that has been registered, issued and ...
  3. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Selling Group

    All financial institutions involved in selling or marketing a ...
  6. Municipal Bond

    A debt security issued by a state, municipality or county to ...
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