Which entity is often selected through a Request for Proposal (RFP) process for bond sales?

The bond underwriter plays a crucial role in the bond sale process and is typically selected through a Request for Proposal (RFP) process. When a government entity or organization plans to issue bonds, they seek assistance in structuring, marketing, and distributing these bonds to investors.

The RFP process allows the issuing entity to evaluate various bond underwriters based on their qualifications, experience, fees, and strategies for selling the bonds. It ensures that the issuer selects the firm that can provide the best terms and support for the bond issuance. The bond underwriter may also assist in determining the appropriate timing for issuance and help price the bonds in a way that meets the issuer’s financial needs while appealing to potential investors.

While investment banks may engage in underwriting, the term "bond underwriter" specifically refers to the entity that directly takes on the responsibility of selling the bonds, making this distinction important. Similarly, financial advisors and credit rating agencies serve different functions, such as providing advice on financing options and assessing the risk of the bond issue, respectively, but they do not engage directly in the underwriting process. Their roles do not typically involve the selection process for bond sales through RFPs in the same way as bond underwriters.