Offering Document

The document prepared by, or for, the Issuer and distributed to investors to provide disclosure with respect to one or more Issues of Bonds. Among other things, it provides material information about the Bond Issue, such as the purpose for the Bond Issue, a description of the Bonds, summaries of all of the documents relevant to the financing, the security for the repayment of the Bonds and financial, economic and other relevant information about the Issuer and/or any Conduit Borrower.

A municipal Offering Document is intended to disclose the material facts, circumstances and risks related to the Bonds and financing that are necessary to enable a reasonable person to make an informed investment decision. Disclosure Counsel, or in some cases Underwriter’s Counsel, has the role of initial coordinator of the Offering Document.  Disclosure Counsel or Underwriter’s Counsel typically prepares a Due Diligence questionnaire to which the Issuer or the Borrower, if any, provides written responses. The Due Diligence questionnaire is designed to elicit material information about the financial and operating condition of the Issuer or the Borrower that should be disclosed in the Offering Document, if material to investors. In most transactions, both a preliminary and a final Offering Document are prepared. The preliminary Offering Document, frequently referred to in a Public Offering of municipal Bonds as a Preliminary Official Statement (“POS”), is traditionally prepared and “mailed” (more recently, “posted” online electronically) to potential investors prior to the sale of the Bonds to the Underwriter (i.e., before the execution of the Bond Purchase Agreement or opening Competitive Bids, as appropriate). The final Offering Document, frequently referred to in a Public Offering of municipal Bonds as an Official Statement (“OS”), must be prepared shortly after the sale of the Bonds and mailed or posted online electronically. The OS is substantially identical to the POS but reflects the final terms of the Bonds as well as any needed changes to the disclosure resulting from the Pricing of the Bonds. If Bonds are not publicly offered, the Offering Document, if any, may be referred to as a Private Placement Memorandum or a Limited Offering Memorandum.

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Learn more about the various documents involved in a municipal securities transaction.

See Also

Preliminary Official Statement (“POS”)

The type of offering document circulated prior to the determination of the interest rates and certain other terms of the bonds when it is anticipated or known the bonds will be purchased by an underwriter and resold to the public.

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Underwriter’s Discount

The difference between the amount an underwriter pays the issuer for the bonds at the closing (i.e., the purchase price) and the price at which the underwriter sells the bonds to the public (i.e., the issue price).