Negotiated Sale

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Selling Group

    All financial institutions involved in selling or marketing a ...
  3. Zone Of Possible Agreement

    Not a physical place, the zone of possible agreement is considered ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Municipal Bond

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

    A reference to a security that has been registered, issued and ...
Related Articles
  1. Brokerage Functions: Underwriting And ...
    Brokers

    Brokerage Functions: Underwriting And ...

  2. Basics Of Federal Bond Issues
    Bonds & Fixed Income

    Basics Of Federal Bond Issues

  3. The Basics Of Municipal Bonds
    Bonds & Fixed Income

    The Basics Of Municipal Bonds

  4. Master The Art Of Negotiation
    Personal Finance

    Master The Art Of Negotiation

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center