Discuss the process of bringing a new international bond issue to market.
Answer: A borrower desiring to increase funds by issuing Eurobonds to the investing public will contact an investment banker and inquire it to serve as lead manager of an underwriting syndicate which will bring the bonds to market. The lead manager will generally invite other banks to form a managing group to assist negotiate terms with the borrower, not fixed market conditions, and manage the issuance.The managing group, together with other banks, will serve as underwriters for the issue that is they will commit their own capital to buy the issue from the borrower at a discount from the issue price. So many underwriters, along with other banks, will be part of a selling group which sells the bonds to the investing public. The several members of the underwriting syndicate receive a portion of the spread (generally in the range of 2 to 2.5% of the issue size), depending on the number and type of functions they perform. The lead manager receives the full spread, and a bank serving as just a member of the selling group receives a smaller portion.