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Overbond Academy Bond Issuers

Bond Issuers - Overview

An overview of how bond issuers interact with the fixed income market

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The Issuer’s Perspective

Primary Bond Market Issuers

Corporations and governments seeking capital to fund existing operations, invest in new projects, finance M&A activities, or refinance existing debt obligations will issue new bonds in the primary bond market. Dealers provide issuers with core services such as funding strategy, market updates, investor marketing, ratings advisory, deal execution, and deal documentation. Issuers must consider the various market (e.g. credit, inflation) and business risks (e.g. liquidity) associated with issuing additional debt.

Type of Securities Offering

There are multiple forms of transactions that issuers can generally choose from:
  1. Agency deal – new issue is sold on a best efforts basis where issuers selects the amount of financing needed and the dealer syndicate solicits investor interest. Dealers assume no obligation to purchase any unsold amount if the demand is lower than anticipated.
  2. Underwritten deal – one or more dealers agree to purchase the new securities as principal and assumes the liability until the final sale is completed.

Legal Documentation

Dealers are responsible for managing and filing legal documentation throughout the debt issuance process. Documentation is kept to support issuer and dealer decision points throughout the issuance process. They include offering memorandums, prospectuses, term sheets, and indentures. Dealers ensure that the new issue is marketed and distributed to investors in different jurisdictions while complying with local filing and disclosure requirements.

Deal Execution

By working with other key stakeholders such as dealers, auditors and legal counsels, issuers must consider the following to execute a bond transaction:
  1. Deal terms such as size of the offering, maturity date, currency
  2. Offering documentation
  3. Corporate disclosures and due diligence
  4. Investor marketing & distribution (e.g. non-deal or deal-related roadshow)
  5. Order book allocation
  6. Sizing & pricing
  7. Hedging
  8. Credit ratings confirmation
  9. Soft-sounding or confidential marketing
  10. Billing & delivery


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