The re offer price refers to the price at which an underwriting syndicate sells bonds to public investors after purchasing them from the issuing firm. The syndicate typically buys these bonds at a set price and then offers them to the public at a different price, which is usually higher than the purchase price. This re offer price can be above the premium amount but is generally below the bonds' par value.
The term "re offer price" is primarily used in the context of securities law and finance. It is relevant in transactions involving bonds, particularly in the underwriting process. Understanding the re offer price is crucial for investors and firms engaged in the issuance and resale of bonds. Users can manage related forms and procedures with tools like US Legal Forms, which provide templates drafted by legal professionals.
Here are a couple of examples of abatement:
Example 1: A company issues bonds with a par value of $1,000. The underwriting syndicate purchases these bonds at $950 each and then re offers them to investors at $980. In this case, the re offer price is $980.
Example 2: A municipal bond is sold to an underwriting firm for $1,000. The firm then re offers the bond to the public at $1,050, which may include a markup for the underwriting services provided. (hypothetical example)
| Term | Definition | Difference |
|---|---|---|
| Offer Price | The initial price set by the issuer for the bonds. | The re offer price is the price after purchase by the syndicate. |
| Par Value | The face value of a bond as stated on the certificate. | The re offer price is typically lower than the par value. |
If you are involved in purchasing bonds, it's important to understand the re offer price. Review the terms provided by the underwriting syndicate and consider using US Legal Forms for templates related to bond transactions. If you find the process complex, seeking advice from a financial advisor or legal professional may be beneficial.
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| Typical Fees | Varies by syndicate and bond type. |
| Jurisdiction | Federal and state securities laws apply. |
| Possible Penalties | Regulatory fines for non-compliance. |
The offer price is the initial price set by the issuer, while the re offer price is what the underwriting syndicate charges public investors after purchasing the bonds.