Series 7: 3.3.2.2.2. Forming The Syndicate: Syndicate Letter

3.3.2.2.2. Forming the Syndicate: Syndicate Letter

Prior to making a bid, potential underwriters collect information on the issuer, the bond, and the market for the bond. Since municipal bonds are exempt from the Securities Act of 1933, underwriters may take presale orders from customers at various interest rates. This helps gauge demand for an issue.

To get the broadest possible view of the market and reach the maximum number of prospective bidders, underwriters will form a syndicate prior to securing the bid. A syndicate is a group of underwriters formed to unde