Re-Offer Price

DEFINITION of 'Re-Offer Price'

A price at which the underwriting syndicate of a debt issue resells the bonds to public investors. The syndicate will purchase the bonds for a specified amount from the issuing firm and re-offer the bonds to the public, usually at a different price.

BREAKING DOWN 'Re-Offer Price'

An underwriting investment bank may facilitate a debt issue by agreeing to purchase all of the bonds for a price below face value. Having the underwriters purchase the bond issue, instead of passing the sale onto the public, removes the company's risk of not selling the entire issue. The investment banker will re-offer the bonds to public investors at a higher price, which may be above (premium) slightly below (discount) par value. In a serial issue, most common to municipal GO bonds, the first bonds to mature are frequently at a premium with a higher coupon rate. The last bonds to mature in the offering are sometimes sold at a discount, but carry a lower coupon rate.

RELATED TERMS
  1. Underwriter Syndicate

    A temporary group of investment banks and broker-dealers who ...
  2. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
  3. Bond

    A debt investment in which an investor loans money to an entity ...
  4. Premium Bond

    1) A bond that is trading above its par value. A bond will trade ...
  5. Bond Purchase Agreement

    A legally binding document between a bond issuer and an underwriter ...
  6. Bond Discount

    The amount by which the market price of a bond is lower than ...
Related Articles
  1. Insurance

    Municipal Bond Tips For The Series 7 Exam

    Learn to distinguish between general obligation and revenue bonds to ace this test.
  2. Professionals

    SYNDICATE OPERATION AND SETTLEMENT

    Creating a Syndicate Most municipal issues are sold to raise a substantial amount of money. In order to assist with the marketing of the issue and to spread the risk of underwriting the securities, ...
  3. Bonds & Fixed Income

    Basics Of Federal Bond Issues

    Treasuries are considered the safest investments, but they should still be analyzed when issued.
  4. Professionals

    Long-Term Liability Basics

    CFA Level 1 - Long-Term Liability Basics. Learn the basics of long-term debt by examining corporate bonds. See what determines if a bond is to sell at a discount or premium.
  5. Professionals

    Issuing Long-Term Debt

    This can be an OK move in the short fun, but it is not something that can be sustained forever.
  6. Professionals

    The Underwriting Syndicate

    Because most corporate offerings involve a large number of shares and a very large dollar amount, they will be offered through several underwriters known as the underwriting syndicate. The syndicate ...
  7. Bonds & Fixed Income

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

    Discover five reasons why investing in municipal bonds after the Fed hikes interest rates, and not before, can be a great way to boost investment income.
  8. Professionals

    Primary Market for Bonds

    Primary Market for Bonds
  9. Professionals

    Types Of Bonds

    We look at the many types of bonds and explain what differentiates them from each other.
  10. Professionals

    THE UNDERWRITING SYNDICATE

    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 ...
RELATED FAQS
  1. What are the key factors that will cause a bond to trade as a premium bond?

    Learn about the primary factor that can cause bonds to trade at a premium, including how national interest rates affect bond ... Read Answer >>
  2. Will the price of a premium bond be higher or lower than its par value?

    Find out why the selling price of a premium bond is always higher than its par value, including how changing interest rates ... Read Answer >>
  3. What happens to the price of a premium bond as it approaches maturity?

    Learn how bonds trade in regard to premiums and discounts, and how bond prices shift closer to par value as bonds approach ... Read Answer >>
  4. How does face value differ from the price of a bond?

    Discover how bonds are traded as investment securities and understand the various terms used in bond trading, including par ... Read Answer >>
  5. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  6. Can the marginal propensity to consume ever be negative?

    Find out when a bond's yield to maturity is equal to its coupon rate, and learn about the basic components of bonds and how ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. 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 ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center