When bonds are sold in the capital markets, the borrower is dependent on either an underwriter or the syndicate to select the final financing structure, including the coupons and yields the bonds will be sold at.
The written award is a formal document that verifies that the borrower agrees to the terms of financing, including the coupons and yields selected to sell the bonds. The agreement also has some general terms about the bonds to ensure that the borrower and the underwriter or syndicate have agreed to those as well.
Once the written award is signed by both parties, CUSIP numbers can be ordered and the DTC can be informed of the issuance.
What’s important here?
The written award finalizes all the specifics of the bond issuance such as the par value per maturity, coupons, yields, and prices, etc. Once the written award is signed by the borrower and either the underwriter or syndicate group – depending on how the bonds are issued – both CUSIP Global Services and the DTC are informed of the issuance.
