Forming a Syndicate

A syndicate is a group of underwriters formed to underwrite a new issue of municipal securities. Syndicates are typically formed to help share the financial risk of underwriting an issue and widen the issue’s distribution. Syndicates are commonly used to issue municipal bonds. They are not commonly used for municipal fund securities. Generally, a lead or managing underwriter takes the largest underwriting commitment and manages the syndicate by allocating securities to the other members. Typically, syndicate members purchase their allotted shares at a discount and sell them to the public at a public offering price. Thus, syndicate members take on the financial risk of unsold shares.

The i