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 Commentary
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 Links
Brokerage Functions: Underwriting And Agency Roles
IPO Basics Tutorial
The Basics of Municipal Bonds
Basics Of Federal Bond Issues
See also: Investment Bank, Municipal Bond, New Issue, Public Offering Price - POP, Selling Group, Underwriting