What does the term "takedown per maturity" refer to in municipal finance?

The term "takedown per maturity" specifically refers to the underwriter's profit margin that is realized for each maturity segment of a bond issue. In municipal finance, when bonds are sold, underwriters play a crucial role in the pricing and distribution of the bonds. The takedown is the portion of the gross spread that goes to the underwriter for their services, and this can vary across different maturities due to the different costs and risks associated with those maturities.

Understanding this concept is essential for anyone involved in municipal finance, as it helps clarify how underwriters are compensated for their roles and the financial dynamics involved in pricing various maturities of bonds. This is particularly relevant when considering bond issuance strategies and the impact of the underwriter’s compensation on the overall cost of borrowing for municipalities.

Other options, while relevant in the broader context of finance, do not accurately define "takedown per maturity." They pertain to costs associated with issuance, refinancing activities, or interest rates, which, while important, are distinct from the specific measurement of underwriter profit per bond maturity.