The Handbook of Municipal Bonds

CHAPTER 2

An Overview of Investment Banking

Herman R. Charbonneau Senior Vice President & Manager Public Finance Department Roosevelt & Cross, Inc.

 

 

 

This chapter provides an overview of investment banking from the perspective of the senior managing underwriter. The principles are basically the same for the large national broker-dealer as well as the smaller regional broker-dealer. This chapter also defines regional investment banking firms, and their share of the overall public finance market, and identifies the services that these firms offer to state-level and local government bond issuers. The competitive advantages and disadvantages of regional firms, vis-à-vis the national market leaders, are also discussed. The chapter concludes with a discussion of some of the challenges currently faced by regional public finance bankers as they seek to maintain and expand their market share.

OVERVIEW OF PUBLIC FINANCE BANKING

Public finance is the business of originating, structuring, and underwriting new municipal bond issues that are sold via a negotiated process. The business also encompasses financial advisory assignments, not entailing underwriting, for new issues. Public finance has grown rapidly over the past two decades as negotiated finance came to dominate the market.

Note: Quantitative date appearing in this chapter regarding municipal bond issuance volume, revenue bond issuance volume, and negotiated and competitive bond issuance volume were taken from The Bond Buyer/Thomson ...