What is the method used to sell TRANs to the public?

The method used to sell Tax and Revenue Anticipation Notes (TRANs) to the public is typically a competitive sale. In a competitive sale, multiple underwriters are invited to submit bids or offers to purchase the notes. The issuer, usually a municipality, then evaluates these bids primarily based on the interest rates proposed and selects the best offer based on their financial objectives.

This process fosters a competitive environment which can help the municipality achieve the lowest possible interest cost, as underwriters aim to present their best possible price to secure the transaction. The competitive sale format also provides transparency, as the bidding process is publicly conducted, allowing for a fair assessment of market conditions.

Other methods, such as a private negotiated sale, typically involve fewer bidders and may not be as effective in achieving the lowest interest rates for the issuer. Direct Public Offering and Open Market Sale are also less common for TRANs since they do not provide the same level of competition and transparency that accompany a competitive sale.