What is the term for the discount an investment bank receives from the public offering price when buying bonds from a syndicate?

The term for the discount an investment bank receives from the public offering price when buying bonds from a syndicate is known as the takedown. This refers to the portion of the spread that is allocated to the underwriter or investment bank as compensation for their role in the bond issuance process.

Understanding the term "takedown" is crucial because it highlights the profitability of the underwriting process for investment banks. When a syndicate of banks works together to underwrite a bond offering, they typically purchase the bonds at a price lower than the price at which they will sell to the public. This difference, or discount, allows the bank to earn a profit once the bonds are resold to investors.

Other terms listed, such as breakpoint, remuneration, and price spread, relate to different financial concepts. A breakpoint usually refers to a threshold for reducing an investor’s fees based on the amount invested. Remuneration typically covers all forms of compensation, not just related to bond underwriting. The price spread refers more generally to the difference between the bid and ask prices of a security, rather than the specific discount related to bond offerings. Thus, understanding what constitutes a takedown is essential for grasping the financial dynamics of bond issuance and underwriting.