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Procedure of bringing new international bond issue to market

Describe the procedure of bringing the new international bond issue to the market.

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A borrower willing to raise funds by issuing the Eurobonds to the investing public may contact an investment banker and request it to serve as lead manager of an underwriting syndicate which will bring bonds to the market. Lead manager will generally requests other banks to form the managing group to help negotiate terms with the borrower, ascertain market conditions, and maintain the issuance.  Managing group, with other banks, may serve as an underwriter for the issue, which means they will commit their own capital in order to buy the issue from the borrower at the discount from the issue price.  Most of underwriters, with other banks, can be a part of selling group that sells bonds to the investing public.  Several members of underwriting syndicate receive a portion of the spread (generally within the range of 2 to 2.5 percent of the issue size), depending on the number and type of the functions they perform.  Lead manager receives the full spread, and the bank serving as only a member of selling group receives the smaller portion.

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