Methods of Sale

When considering how to enter the capital markets by issuing debt, issuers should consider a broad range of financing options. Northland is uniquely suited to help issuers determine which is the right sale method for an issuer's debt transaction and, as a broker/dealer, we can conduct all types of financings for our clients, whether competitive or negotiated, private placement or auction. When it comes to issuing bonds or other obligations, we discuss with our clients each of the following methods to help them determine the best option for their transaction.

Traditional Competitive Sale – In this type of underwriting, investment banking firms submit bids in accordance with specifically advertised criteria at a set date and time. All elements of the bid opening and award are conducted effectively and efficiently. Upon bid opening, all bids are verified for accuracy and compliance with the terms. The bids are then ranked and summarized with the final results and a recommendation presented to the issuer for consideration and award.

Competitive Sale by Internet Auction – Using today's e-commerce capabilities, we offer an alternative cost-effective method for issuers to sell bonds competitively. Our auction website, NSIauction.com, takes fixed-income competitive public sales beyond the typical method to an auction system via the Internet, providing significant operational efficiencies to governmental debt issuers throughout the country. Issuers can see the auction results as they are happening and bidders have the ability to improve their bid during the competition.

Negotiated Sales – This type of underwriting is one in which the underwriter assists the issuer early in the process with the proper debt structuring and documentation, and then negotiates the appropriate pricing and terms for the client.

Private Placement – A private placement is a negotiated sale typically placed with a single "lead" investor and used for small issues or "story" bonds which require a higher level of explanation on the financing and how it will be paid over time.

In addition to serving as financial advisor to municipalities and governmental agencies, Northland is a significant underwriter of municipal debt. These dual capabilities provide a distinct advantage to issuers. Not only can staff draw upon our experience to develop a finance plan, but also our expertise as underwriters to provide an in-depth and up-to-the-minute look at market information. Having this information firsthand is useful to the structuring of upcoming financings and determining the most appropriate method of sale.