Series 50: Formulating The Bid

Formulating the Bid

With the preliminary official statement, continuing disclosure agreement, and syndicate letter in tow, the syndicate then begins to solicit market interest, compiling as much market information and as many firm offers as possible from potential buyers.

Just prior to the issuer’s announced date for the auction, syndicate members will meet to:

•Discuss possible bids

•Set the reoffering scale, the desired spread, and how the spread is to be apportioned

•Decide on their commitments to the syndicate

Reoffering scale. The reoffering scale is the set of prices or yields at which the new securities will be offered to the public for each maturity. The managing underwriter will decide how much spread (compensation) the syndicate requires and subtract it from the reoffering scale prices to determine its submitting bids. Once the bid